How Did Applied Digital Stock Leave Its Industry Behind?
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Over the five years to October 27, 2026, one stock outperformed 25 of the 29 companies in its industry with a full five years of prices. That stock is Applied Digital (APLD), a company that designs, builds and runs large data centers for AI and other high-performance computing. It belongs to the IT consulting and other services industry, part of the information technology sector. So did Applied Digital rise with its industry, or on its own?
How Far Applied Digital Is Ahead Of Its Industry
Applied Digital stock rose 295.7% over those five years, while the typical company in its industry fell 28.9%.
| 1-year | 3-year | 5-year | |
|---|---|---|---|
| Applied Digital (APLD) | -43.2% | 305.6% | 295.7% |
| IT Consulting & Other Services industry (median company) | -30.6% | -2.1% | -28.9% |
| Information Technology sector (median company) | -8.1% | 42.5% | -16.8% |
| All stocks in our data (median company) | -1.0% | 34.0% | -2.0% |
| S&P 500 index | 12.3% | 85.3% | 69.7% |
Total return to 2026-10-27, including dividends; the S&P 500 row is the index level, price only. Industry, sector and all-stock rows are the median company of each group.
The industry and sector rows display the median company within each group, representing a typical business of any size, while the S&P 500 row tracks the index itself. Put plainly, Applied Digital finished far ahead of most companies in its industry, even as the typical peer lost ground.
Was It Applied Digital’s Industry?
The S&P 500 index rose 69.7% over those five years, but the typical stock in our data slipped 2.0%. Applied Digital still posted a rise more than four times the index’s.
The company found no support from its own corner of the market. The typical information technology company fell 16.8%, and Applied Digital’s industry ranked 10th of the 12 industries in that sector. So Applied Digital rose against its industry’s tide, not with it.
What Did Applied Digital’s Business Do?
Applied Digital grew its sales far faster than its industry. Its revenue growth averaged 138.2% a year over the last three years, compared with 4.5% for the typical company in its industry.
Profit is another matter. Applied Digital lost money at the operating level over the twelve months ended August 31, 2026, posting an operating margin of -28.6%. It also posted a net loss, with a net margin of -54.2%, so the company lacks a price-to-earnings multiple to set beside the 17.3 times earnings that the typical profitable company in its industry trades at. Its diluted share count also rose 548.8% between 2021 and 2026, leaving each share to represent a much smaller slice of the company. Applied Digital stands apart from its industry on sales growth, rather than on profit per share or a richer multiple.
Data centers account for that growth. The HPC hosting business made up 63.0% of revenue in fiscal 2026. On the October 7, 2026 call, management said the next campuses it must finance are all leased to the same Tier 1 investment-grade hyperscaler under 15-year take-or-pay leases.
Is Applied Digital Still Ahead Over The Past Year?
No. Over the year to October 27, 2026, Applied Digital outperformed only 12 of the 36 companies it was compared with in its industry, meaning most of them did better than it did.
On the October 7 call, management said it expects to place over 600 megawatts into service over the next 12 months, compared with 250 megawatts over the past 12 months. Revenue growth from a year earlier was 322.4% in fiscal Q1 2027, and it is the measure to watch again when Applied Digital reports in January 2027.
How To Act On APLD?
Not necessarily on Applied Digital alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Applied Digital is one. Over the five years to October 2026, its stock rose 295.7%, ahead of 25 of the 29 other companies in IT Consulting & Other Services, where the typical company fell 28.9%.
Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.
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