Applied Digital Stock Edges Up 0.26 as $840M Trading Volume Ranks 123th Amid AI Expansion and Debt-Fueled Growth Bets

Market Snapshot

Applied Digital (APLD) rose 0.26% on December 5, 2025, with a trading volume of $0.84 billion, ranking 123rd in daily liquidity among U.S.-listed stocks. The modest gain follows a series of strategic moves to solidify its position in AI infrastructure, including a $25 million investment in liquid-cooling innovator Corintis and the completion of a 100 MW phase at its Polaris Forge 1 AI campus. Despite the uptick, the stock remains volatile, reflecting broader market skepticism about its capital-intensive expansion and profitability timeline.

Key Drivers

Strategic Investment in Cooling Technology

Applied Digital’s $25 million lead investment in Corintis, a Swiss firm specializing in direct-to-chip liquid cooling, underscores its focus on advancing energy-efficient AI infrastructure. Corintis’ technology, validated by Microsoft, promises up to threefold lower chip temperatures and higher power density compared to conventional cooling methods. This aligns with Applied Digital’s strategy to deploy ultra-high-density GPU systems at its North Dakota campuses, where liquid cooling is critical for managing heat in AI workloads. The investment also strengthens Applied Digital’s ecosystem partnerships, positioning it to benefit from rising demand for sustainable, high-performance data centers.

Expansion of Hyperscale Leases and Campus Development

The company’s Polaris Forge 1 campus in Ellendale, North Dakota, reached a 100 MW critical IT load after completing the second 50 MW phase of Building 1. This milestone accelerates its transition from crypto hosting to AI-focused leasing, with 400 MW fully contracted to CoreWeave under 15-year terms. The campus is projected to generate $11 billion in revenue over its lease term, with recurring rental income expected to begin as early as late 2025. Additionally, Polaris Forge 2, a 300 MW campus under development, secured a $5 billion lease with an unnamed U.S. investment-grade hyperscaler, further diversifying its revenue base. Together, these projects contribute to a $16 billion contracted AI revenue pipeline, reinforcing the company’s long-term growth narrative.

Financing and Partnership Milestones

Applied Digital’s $2.35 billion senior secured notes offering, priced at 97% of par with a 9.25% coupon, funds the construction of its Ellendale data centers and repays existing bridge financing. The company also secured $787.5 million in equity from Macquarie Asset Management to expand its AI campuses, leveraging preferred equity and project financing to minimize dilution for common shareholders. These moves highlight its ability to access capital despite a heavy debt load, though analysts caution that execution risks and high leverage could pressure margins if hyperscaler demand or utilization falls short of projections.

Transition to Recurring Revenue Model

The shift from one-time tenant-fit-out revenue to long-term leasing marks a pivotal change in Applied Digital’s business model. As Polaris Forge 1 and 2 transition to operational phases, the company anticipates a shift toward stable, recurring rental income, which improves visibility for investors. For example, the first 100 MW at Polaris Forge 1 is expected to generate approximately $150 million in annualized revenue if leased at similar terms to CoreWeave. This transition, coupled with the Corintis investment, strengthens Applied Digital’s position as a provider of AI-optimized infrastructure, addressing a sector poised for multi-year growth.

Market Risks and Valuation Considerations

Despite these developments, Applied Digital faces significant challenges. The company reported a $27.8 million net loss in Q1 FY 2026, with adjusted EBITDA at $0.5 million, reflecting ongoing losses as it funds expansion. Its valuation, trading at a 49x price-to-sales multiple, remains elevated relative to peers, supported by bullish forecasts for AI-driven demand. However, risks include execution delays, rising interest costs from its $2.35 billion debt, and reliance on a concentrated customer base. Analysts remain split, with some highlighting the potential for 50%+ upside if the company meets its 2028 revenue targets, while others warn of steep downside if capital costs or demand falter.

Strategic Positioning in the AI Infrastructure Sector

Applied Digital’s aggressive expansion and technological bets position it as a key player in the AI infrastructure boom. By integrating cutting-edge cooling solutions and securing long-term hyperscale leases, the company is addressing the industry’s need for high-density, energy-efficient data centers. However, its success hinges on maintaining execution momentum, managing debt obligations, and demonstrating profitability as AI demand evolves. For now, the market appears to price in optimism about its long-term potential, though near-term volatility and financial risks remain pronounced.