Applied Digital Stock To $16?

Applied Digital (APLD) stock has fallen 18% during the past day, and is currently trading at $22.98. Our multi-factor assessment suggests that it may be time to sell APLD stock. We have, overall, a pessimistic view of the stock, and a price of $16 may not be out of reach. We believe there is a near-equal mix of good and bad in APLD stock given its overall Moderate operating performance and financial condition. But keeping in mind its Very High valuation, we think that the stock is Unattractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $5.9 Bil in market cap, Applied Digital provides high-performance computing and AI cloud services through North American datacenters, specializing in digital infrastructure and crypto hosting solutions.

[1] Valuation Looks Very High

This table highlights how APLD is valued vs broader market. For more details see: APLD Valuation Ratios

[2] Growth Is Very Strong

• Applied Digital has seen its top line grow at an average rate of 172.2% over the last 3 years
• Its revenues have grown 9.3% from $135 Mil to $148 Mil in the last 12 months
• Also, its quarterly revenues grew 84.3% to $64 Mil in the most recent quarter from $35 Mil a year ago.

This table highlights how APLD is growing vs broader market.

[3] Profitability Appears Very Weak

• APLD last 12 month operating income was $-46 Mil representing operating margin of -31.3%
• With cash flow margin of -82.3%, it generated nearly $-122 Mil in operating cash flow over this period
• For the same period, APLD generated nearly $-244 Mil in net income, suggesting net margin of about -165.0%

This table highlights how APLD profitability vs broader market.

[4] Financial Stability Looks Strong

• APLD Debt was $700 Mil at the end of the most recent quarter, while its current Market Cap is $5.9 Bil. This implies Debt-to-Equity Ratio of 12.0%
• APLD Cash (including cash equivalents) makes up $74 Mil of $2.4 Bil in total Assets. This yields a Cash-to-Assets Ratio of 3.1%

[5] Downturn Resilience Is Moderate

APLD saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• APLD stock fell 82.6% from a high of $5.06 on 26 October 2021 to $0.88 on 13 July 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 16 May 2023
• Since then, the stock increased to a high of $37.76 on 15 October 2025 , and currently trades at $22.98

 
2020 Covid Pandemic

• APLD stock fell 67.6% from a high of $0.03 on 9 July 2020 to $0.01 on 29 July 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 3 December 2020

 
2008 Global Financial Crisis

• APLD stock fell 91.7% from a high of $0.12 on 10 November 2008 to $0.01 on 11 December 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 29 July 2009

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read APLD Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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