Applied Digital Surges 4.9% on AI Infrastructure Momentum: Can the Bull Run Continue?

Summary
• APLD shares trade at $36.945, up 4.9% from $35.22 previous close
• Intraday range of $34.53 to $37.47 shows volatile 5.3% swing
• $11B CoreWeave contract and $5B undisclosed client deal drive optimism
• 250% YoY revenue growth and $5B+ financing from Macquarie/Nvidia underpin momentum
Applied Digital (APLD) is surging on a perfect storm of AI infrastructure demand, strategic financing, and high-profile partnerships. With a 4.9% intraday gain and a $37.47 high, the stock reflects investor confidence in its role as a 'modern-day picks and shovels' provider for the AI era. The $11B CoreWeave contract and $5B+ in secured financing position APLD to capitalize on the AI power bottleneck, but valuation risks and CAPEX-heavy operations remain critical watchpoints.

AI Infrastructure Contracts and Strategic Financing Fuel Rally
APLD's 4.9% intraday surge stems from two catalysts: $11B in locked-in CoreWeave contracts and $5B+ in secured financing from Macquarie and Nvidia. The company's Polaris Forge 1 campus is now 100MW operational, with 400MW of contracted capacity creating a $16B revenue backlog. Recent $337.5M financing draws and a $2.35B private offering have de-risked capital needs, while Nvidia's 'Preferred Cloud Partner' designation has elevated APLD's profile in the AI infrastructure ecosystem. These developments validate APLD's business model as a critical enabler of AI deployment, despite its 15% gross margin and CAPEX-heavy buildout phase.

Data Center REITs Outperform as AI Demand Reshapes Real Estate
The Data Center REIT sector is outperforming broader real estate as AI infrastructure demand reshapes commercial property fundamentals. Blackstone's BREIT returned 8.1% in 2025, driven by its QTS data center platform now representing 20% of its portfolio. Equinix (EQIX), the sector leader, trades with a 0.26% intraday gain, reflecting its established position in hyperscale cloud services. APLD's unique value proposition—custom-built AI data centers with 15-year leases—positions it to outperform traditional REITs as AI power demand accelerates, though its -137x P/E and 9.29% turnover rate highlight structural risks.

Options Playbook: Leveraging APLD's Volatility with Gamma-Driven Calls
• MACD: 2.44 (above signal line 1.43), Histogram: 1.01 (bullish divergence)
• RSI: 71.91 (overbought territory)
• Bollinger Bands: $39.54 (upper), $29.24 (middle), $18.94 (lower)
• 200D MA: $17.91 (far below current price)
APLD's technicals suggest a continuation of its AI-driven rally, with key resistance at $39.54 (Bollinger upper) and support at $29.24 (20D MA). The 71.91 RSI indicates overbought conditions, but the MACD's bullish divergence and high gamma options suggest volatility remains on the buy side. Two options stand out for aggressive positioning:

• APLD20260123C35.5 (Call, $35.5 strike, 1/23 expiry):
- IV: 91.45% (high volatility)
- Delta: 0.6237 (moderate sensitivity)
- Theta: -0.2234 (rapid time decay)
- Gamma: 0.0765 (high sensitivity to price moves)
- Turnover: 622,564 (liquid)
- Leverage: 14.05%
This contract offers 54.44% potential payoff if APLD hits $37.47 (5% upside from $36.945), with high gamma amplifying gains as the stock approaches the strike.

• APLD20260123C36 (Call, $36 strike, 1/23 expiry):
- IV: 86.50% (mid-range volatility)
- Delta: 0.5857 (moderate sensitivity)
- Theta: -0.2147 (rapid time decay)
- Gamma: 0.08298 (high sensitivity)
- Turnover: 757,540 (liquid)
- Leverage: 16.45%
With 55.71% potential payoff on a $37.47 target, this option balances leverage and liquidity. Its high gamma makes it ideal for a breakout above $36.50, where APLD's 52W high of $40.20 could reaccelerate.

Aggressive bulls should consider APLD20260123C36 into a break above $36.50, while hedgers may use APLD20260123P35 (Put, $35 strike) for downside protection.

Backtest Applied Digital Stock Performance
The backtest of APDL's performance after an intraday surge of more than 5% from 2022 to the present shows favorable results. The 3-Day win rate is 52.38%, the 10-Day win rate is 54.33%, and the 30-Day win rate is 55.19%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 33.74% over 30 days, suggesting that APDL can deliver significant gains even after the initial 5% surge.

APLD at Inflection Point: Power the AI Train or Risk Derailment
Applied Digital stands at a critical juncture as its Polaris Forge 2 campus ramps and CoreWeave's 400MW deployment nears completion. The stock's 4.9% rally reflects optimism in its $16B contracted backlog and strategic financing, but its -137x P/E and 15% gross margin remain red flags. Investors must watch for execution risks in data center construction and AI demand slowdowns, which could strain its $2.35B debt load. For now, the 52W high of $40.20 and Equinix's 0.26% gain suggest the AI infrastructure trade remains intact. Take action: Buy APLD20260123C36 if $36.50 breaks, or short APLD20260123P35 for downside protection below $35.