Applied Digital Soars 16% on $3 Billion AI Campus Breakthrough – What’s Next for the Bull Run?

Summary
• Applied Digital (APLD) surges 16.3% to $16.39, hitting a 52-week high of $16.92
• $3 billion Polaris Forge 2 AI campus in North Dakota triggers market frenzy
• Turnover spikes to 64.69 million shares, 31.19% of float
• CEO Wes Cummins signals advanced negotiations with a U.S. hyperscaler
Applied Digital’s stock has erupted on news of its $3 billion AI campus expansion, with the stock trading at a 16.3% premium to its previous close. The move follows a strategic announcement of groundbreaking in September 2025 for Polaris Forge 2, a 280MW facility in North Dakota. With intraday volatility reaching 16.92 (high) to 14.66 (low), the market is pricing in aggressive growth expectations tied to AI infrastructure demand.

AI Campus Breakthrough Ignites 16% Surge in Applied Digital
Applied Digital’s 16.3% intraday surge is directly tied to its announcement of Polaris Forge 2, a $3 billion AI campus in North Dakota. The project, set to begin operations in 2026, positions the company to capitalize on surging demand for AI compute power from hyperscalers and enterprises. CEO Wes Cummins highlighted advanced negotiations with a U.S.-based investment-grade hyperscaler, signaling immediate revenue potential. The campus’s 280MW capacity, scalable beyond initial plans, aligns with North Dakota’s energy advantages and strategic appeal for AI infrastructure. This news, combined with the company’s existing Polaris Forge 1 facility, has repositioned APLD as a key player in the AI infrastructure boom, driving speculative and institutional buying.

Data Processing Sector Mixed as Applied Digital Outperforms
The Data Processing & Outsourced Services sector, led by Equinix (EQIX), saw a -0.97% intraday decline, contrasting APLD’s 16.3% surge. While sector peers like OBI Services and Automatic Data Processing (ADP) reported incremental growth, APLD’s AI campus announcement created a unique catalyst. The disparity highlights APLD’s focus on high-margin AI infrastructure versus traditional data processing services. North Dakota’s energy and land advantages further differentiate APLD’s value proposition, making its growth trajectory less correlated to broader sector trends.

Options Playbook: Leveraging APLD’s Volatility with Gamma-Driven Contracts
• MACD: 1.12 (above signal line 1.04), bullish crossover
• RSI: 68.8 (neutral to overbought)
• Bollinger Bands: Price at 16.39 (near upper band 16.50)
• 200D MA: 8.48 (far below current price)
APLD’s technicals suggest a continuation of bullish momentum, with RSI near overbought levels and MACD in positive territory. The stock is trading above its 200-day average by 94%, indicating strong short-term conviction. For traders, the key levels to watch are the 52-week high of $16.92 and the 200D MA at $8.48. A 5% upside scenario (targeting $17.20) could trigger significant gamma-driven options activity.

Top Option 1: APLD20250822C17
• Contract Code: APLD20250822C17
• Type: Call
• Strike Price: $17.00
• Expiration: 2025-08-22
• IV Ratio: 97.87% (high volatility)
• Leverage Ratio: 28.14% (moderate)
• Delta: 0.443 (moderate sensitivity)
• Theta: -0.1337 (rapid time decay)
• Gamma: 0.2076 (high sensitivity to price changes)
• Turnover: $587,338 (high liquidity)
This contract offers a balance of leverage and liquidity, ideal for capitalizing on a short-term breakout above $17.00. The high gamma ensures rapid premium gains if the stock approaches the strike price.

Top Option 2: APLD20250822C16.5
• Contract Code: APLD20250822C16.5
• Type: Call
• Strike Price: $16.50
• Expiration: 2025-08-22
• IV Ratio: 92.08% (moderate volatility)
• Leverage Ratio: 21.56% (moderate)
• Delta: 0.547 (moderate sensitivity)
• Theta: -0.1429 (rapid time decay)
• Gamma: 0.2214 (high sensitivity to price changes)
• Turnover: $463,877 (high liquidity)
This contract provides a safer entry point for bulls, with a strike price below the current price. The high gamma ensures significant premium appreciation if the stock rallies toward $16.50.

Payoff Estimation:
• A 5% upside to $17.20 would yield a $0.20 payoff for APLD20250822C17 (max(0, 17.20 - 17.00)).
• APLD20250822C16.5 would see a $0.70 payoff (max(0, 17.20 - 16.50)).
Aggressive bulls should consider APLD20250822C16.5 into a breakout above $16.50, while APLD20250822C17 offers high-reward potential for a push toward $17.00.

Backtest Applied Digital Stock Performance
The 16% intraday surge in APLD on August 18, 2020, has historically led to positive short-to-medium-term gains. The backtest data shows that:1. Frequency and Win Rates: The event occurred 395 times over the past five years, with a 3-day win rate of 52.41%, a 10-day win rate of 54.43%, and a 30-day win rate of 54.94%. This indicates a higher probability of positive returns in the immediate aftermath of the surge.2. Returns: The average 3-day return following the event is 1.27%, with a maximum return of 31.60% on day 59. The 10-day return is 4.64%, with a maximum return of 37.20% on day 94. The 30-day return is 14.14%, with a maximum return of 42.80% on day 119.3. Maximum Returns: The data shows that the stock can experience significant gains, with the potential for returns exceeding 30% in the month following the surge.In conclusion, while there is no guarantee of future performance, the historical data suggests that APLD is likely to experience positive returns in the days and weeks following a significant intraday surge.

Bullish Momentum Unlikely to Subside – Position for Next Leg Higher
Applied Digital’s 16.3% surge is a clear signal of market confidence in its AI infrastructure ambitions. With Polaris Forge 2 set to begin operations in 2026 and a strategic partnership with a U.S. hyperscaler in the works, the stock’s momentum appears sustainable. Traders should monitor the 52-week high of $16.92 and the 200D MA at $8.48 as critical levels. For a broader market context, Equinix (EQIX)’s -0.97% decline underscores APLD’s unique positioning in the AI sector. Investors are advised to capitalize on the gamma-driven options activity and position for a potential breakout above $17.00. Watch for a sustained close above $16.92 to confirm the next phase of this bull run.