Applied Digital Soars 5.7% on AI Infrastructure Expansion and Strategic Financing

Summary
• Applied Digital (NASDAQ:APLD) surges 5.7% to $36.18, hitting a 52-week high of $39.33
• Q3 revenue beats estimates by 17.6% at $64.2M, with adjusted EPS of -$0.03 vs. -$0.16 expected
• $11B CoreWeave lease and $112.5M Macquarie financing drive optimism
• RSI at 79.34 signals overbought territory, while MACD (3.77) confirms bullish momentum

Applied Digital’s stock is racing toward its 52-week high amid a transformative quarter for the AI infrastructure developer. A landmark 400MW lease with CoreWeave and a $5B financing facility with Macquarie Asset Management have ignited investor enthusiasm. With the stock trading above key moving averages and options volatility surging, the market is pricing in aggressive growth potential despite ongoing cash burn.

AI Infrastructure Expansion and Strategic Financing Fuel Rally
Applied Digital’s 5.7% intraday surge is driven by two pivotal developments: a $11 billion, 15-year lease with CoreWeave for its North Dakota AI campus and a $5 billion preferred equity financing facility with Macquarie Asset Management. The lease secures full utilization of Polaris Forge 1’s 400MW capacity, while the financing reduces equity contribution requirements, enabling rapid scale. CEO Wes Cummins emphasized the company’s positioning as the 'modern-day picks and shovels' of the AI era, with hyperscalers investing $350 billion in AI deployment this year. Analysts from Needham and Lake Street have raised price targets to $40–$37, reflecting confidence in APLD’s role in the AI infrastructure boom.

Colocation Sector Gains Momentum as APLD Outperforms
The colocation data center sector is experiencing heightened demand amid the AI infrastructure boom, with Applied Digital outpacing peers like Digital Realty Trust (DLR), which fell 0.01% intraday. APLD’s strategic focus on AI-specific infrastructure—coupled with its recent financing and lease announcements—positions it as a high-growth alternative to traditional colocation providers. While DLR and others focus on enterprise and cloud clients, APLD’s alignment with hyperscalers like CoreWeave taps into the explosive demand for AI compute power, creating a divergent growth trajectory.

Options and ETF Plays for APLD’s AI-Driven Momentum
• 200-day MA: $10.88 (well below current price)
• RSI: 79.34 (overbought)
• MACD: 3.77 (bullish)
• Bollinger Bands: $16.47–$33.54 (price at upper band)

APLD’s technicals suggest a continuation of its bullish trend, with key support at the 50-day MA ($18.44) and resistance near its 52-week high ($39.33). The stock’s 14.85% turnover rate and elevated RSI indicate strong short-term momentum, though overbought conditions may invite profit-taking. For leveraged exposure, consider the Direxion Daily Artificial Intelligence Index Bull 3X ETF (AIIL), which tracks AI-driven tech firms and could amplify APLD’s sector gains.

Top Options Plays:
• APLD20251024C36 (Call, $36 strike, Oct 24 expiry)
- IV: 137.25% (high volatility)
- Delta: 0.55 (moderate directional sensitivity)
- Theta: -0.215 (rapid time decay)
- Gamma: 0.046 (responsive to price swings)
- Turnover: $150M (high liquidity)
- Leverage: 10.32% (moderate)
- Payoff at 5% upside ($37.99): $1.99/share
- This call offers a balance of leverage and liquidity, ideal for capitalizing on a potential breakout above $36.

• APLD20251024C37 (Call, $37 strike, Oct 24 expiry)
- IV: 129.92% (elevated)
- Delta: 0.50 (neutral directional bias)
- Theta: -0.204 (aggressive time decay)
- Gamma: 0.049 (high sensitivity to price moves)
- Turnover: $307K (solid liquidity)
- Leverage: 12.54% (attractive)
- Payoff at 5% upside ($37.99): $0.99/share
- This contract’s high gamma and moderate delta make it a strong play for a continuation of APLD’s upward trajectory.

Action Alert: Aggressive bulls should consider APLD20251024C36 into a break above $36.50, while conservative traders may use APLD20251024C37 as a core position with a stop below $35.50.

Backtest Applied Digital Stock Performance
Here is the interactive back-test you requested. You can explore the full event-study charts and metrics in the panel on the right.Key takeaways (not shown in the module table):• Across 161 surge events, APLD’s average performance in the following month trails the benchmark by roughly 4 ppts, and none of the horizons exhibit statistical significance—indicating the 6 % spike is not a reliable bullish signal on its own. • Volatility increases immediately after the surge, so risk-adjusted returns look weaker than the raw percentage gains. • Layering an additional filter (e.g., surge on above-average volume) may improve predictive power; feel free to let me know if you’d like to test that variant.Parameter notes:1. Price Type: Close (default) – intraday highs were unavailable in the public feed, so daily close change ≥ 6 % served as our “intraday surge” proxy. 2. Event Window: ±30 trading days – industry convention for short-term post-event drift. 3. Back-test Sample: 2022-01-03 to 2025-10-14 – covers the full history since APLD listed.Let me know if you’d like deeper cuts, alternative thresholds, or strategy simulations based on these events!

APLD’s AI Infrastructure Play Gains Traction—Watch for $39.33 Breakout
Applied Digital’s strategic positioning in the AI infrastructure boom, backed by a landmark CoreWeave lease and Macquarie financing, has created a compelling growth narrative. While the stock’s 5.7% surge reflects optimism, its 79.34 RSI and overbought conditions suggest a potential pullback. However, the 14.85% turnover rate and elevated options volatility indicate strong institutional support. Investors should monitor the 52-week high of $39.33 as a critical breakout level. For context, sector leader Digital Realty Trust (DLR) fell 0.01% intraday, underscoring APLD’s divergent momentum. Act now: Buy APLD20251024C36 for a high-gamma play on a potential $39.33 breakout, or use the Direxion AIIL ETF for leveraged sector exposure.