Applied Digital Skyrockets 30.56%—Is This AI Infrastructure Breakthrough the New Game Changer?

Summary
• Shares of Applied Digital (NASDAQ: APLD) surged 30.56% intraday, trading at $13.095 as of 7:31 PM ET.
• A landmark 15-year, 400-megawatt leasing agreement with CoreWeave secured $11 billion in contracted revenue.
• Analysts at Needham and HC Wainwright raised price targets to $16 and $15, respectively, following the earnings beat.
• The stock’s explosive move—its largest single-day gain in over a year—has sparked urgent questions: Is this a fleeting rally or the start of a new AI-driven era for APLD?

Landmark CoreWeave Deal Ignites Investor Optimism
Applied Digital’s 30.56% surge was catalyzed by its transformative 15-year, 400-megawatt leasing agreement with CoreWeave, a major AI infrastructure player. The deal, worth $11 billion in contracted revenue, positions APLD as a key player in the AI and high-performance computing (HPC) boom. The company’s adjusted loss of $0.03 per share—well above estimates—was overshadowed by the strategic partnership’s long-term revenue visibility. Analysts at Needham and HC Wainwright highlighted the deal’s significance, with John Todaro upgrading the price target to $16 and Kevin Dede to $15. This move reflects a broader market shift toward AI infrastructure, with investors betting on APLD’s Polaris Forge 1 data center campus as a scalable solution for AI workloads.

APLD Surges as Sector Struggles, Outperforming Data Processing Peers
While Applied Digital’s stock soared, its sector leader Equinix (EQIX) fell 0.88%, underscoring APLD’s divergence from broader data center trends. The sector, typically sensitive to interest rates and capex cycles, faces mixed momentum as AI demand drives selective outperformance. APLD’s unique focus on AI-specific infrastructure—purpose-built for high-performance computing—has created a niche insulated from traditional data center headwinds. This divergence highlights APLD’s potential to capitalize on the AI arms race, even as peers grapple with near-term challenges.

Options and ETFs to Watch: Leverage APLD’s Volatility with Precision
• Kline Pattern: Short-term bearish trend, Long-term ranging
• MACD: 0.172 (bullish), Signal Line: 0.249, Histogram: -0.077 (bearish divergence)
• RSI: 56.55 (neutral)
• Bollinger Bands: Upper $11.81, Middle $10.30, Lower $8.78 (current price above upper band)
• 200D MA: $8.11 (price above)
• Key Levels: 200D support at $7.19, 30D support at $10.55
• Options Liquidity: APLD20250808C14 and APLD20250815C14 show high turnover (695,518 and 695,518 shares) and implied volatility (95.37% and 94.51%).

Top Options Picks:
1. APLD20250808C14
• Code: APLD20250808C14
• Type: Call
• Strike Price: $14.00
• Expiration: 2025-08-08
• IV: 95.37% (high volatility)
• Leverage Ratio: 31.73% (high)
• Delta: 0.3418 (moderate sensitivity)
• Theta: -0.0594 (rapid time decay)
• Gamma: 0.1884 (high sensitivity to price movement)
• Turnover: 289,711 shares
• Why it stands out: High leverage and gamma make this call ideal for a 5% upside scenario (projected price: $13.75). Payoff would be max(0, $13.75 - $14.00) = $0 (breakeven), but rapid gamma amplifies gains if APLD breaks $14.00.

2. APLD20250815C14
• Code: APLD20250815C14
• Type: Call
• Strike Price: $14.00
• Expiration: 2025-08-15
• IV: 94.51% (high)
• Leverage Ratio: 20.02% (moderate)
• Delta: 0.3967 (moderate sensitivity)
• Theta: -0.0434 (moderate time decay)
• Gamma: 0.1497 (moderate sensitivity)
• Turnover: 695,518 shares
• Why it stands out: Slightly lower leverage but higher liquidity and a longer expiration (8 days) offer flexibility. In a 5% upside scenario, the payoff would be $0.75 (max(0, $13.75 - $14.00)), with moderate gamma amplifying gains if APLD surges past $14.00.

Action Insight: Aggressive bulls should target APLD20250808C14 for a short-term breakout play, while APLD20250815C14 suits a more conservative, time-extended approach. Monitor $14.00 as a critical psychological level.

Backtest Applied Digital Stock Performance
The 31% intraday surge in Applied Digital (APLD) represents a significant catalyst for its stock performance. Backtesting reveals a strong likelihood of continued upward momentum, though volatility is expected to remain high:1. Historical Context: The 31% surge is a substantial event, placing APLD in an elevated state. This historical context suggests that the stock has the potential to continue its upward trajectory.2. Volatility Expectations: While the 31% intraday surge in APLD is a strong signal for continued growth, investors should be prepared for potential volatility and a possible period of consolidation before the stock may continue its upward trend.

APLD’s AI Bet: A High-Volatility Play with Long-Term Potential
Applied Digital’s 30.56% rally is a testament to the market’s belief in its AI infrastructure strategy, fueled by the CoreWeave deal and analyst upgrades. While technical indicators suggest short-term bearish pressure (Kline pattern, bearish MACD divergence), the stock’s proximity to its 52-week high ($15.42) and $11 billion revenue contract justify optimism. Investors should watch the $14.00 level as a key inflection point—breaking this could validate the AI-driven narrative. Meanwhile, the sector leader Equinix’s 0.88% decline highlights APLD’s unique positioning. For those with a high-risk tolerance, the APLD20250808C14 option offers a high-leverage bet on a potential $14.00 breakout. If the stock consolidates, the 200D support at $7.19 remains a critical floor to monitor.