<div id="readability-page-1">Money Markets Applied Digital Stock: Valuing The AI Infrastructure Play  ByTrefis Team ,  Contributor.  Forbes contributors publish independent expert analyses and insights. Building a platform to do the job of 1 million analysts for  Great Speculations Follow Author Dec 08, 2025, 05:00am EST Share Save Comment  CHONGQING, CHINA - SEPTEMBER 28: In this photo illustration, a hand holds a smartphone displaying the logo of Applied Digital Corporation (NASDAQ: APLD), the American company specializing in data centers and digital infrastructure, with its brand logo seen in the background on September 28, 2025 in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images) Getty Images Applied Digital (NASDAQ:APLD) is a digital infrastructure firm that designs, constructs, and operates AI-focused data centers and high-performance computing (HPC) facilities. The stock has increased by nearly 22% over the past five trading days and is up approximately 4x year-to-date. This recent increase was fueled by favorable trends in the broader AI sector. Additionally, the completion and Ready for Service (RFS) designation for Applied Digital’s first AI data center, a 100-megawatt (MW) facility at the Polaris Forge 1 campus in North Dakota, provided investors with solid evidence that the company can follow through on its ambitious AI infrastructure objectives. While Applied Digital's business is central to the current AI infrastructure surge, boasting a valuation close to $9 billion and a stock trading at a high 33x forward revenue, investors are now questioning whether the rally can sustain itself.  Individual stocks can rise or fall dramatically, but one factor remains crucial: maintaining your investment. High Quality Portfolio helps you to achieve that.  Custom Built AI Data Centers  Applied develops its campuses from the ground up to fulfill the extreme power density, cooling requirements, and scalability needs of accelerated computing. Its facilities incorporate liquid cooling, advanced power systems, and renewable energy solutions to optimize efficiency and lower operational costs. Site selection is based on availability of affordable clean energy and naturally cooler climates.  This tailored approach represents Applied’s competitive advantage. While the majority of colocation and cloud service providers modify existing facilities for AI, Applied refines each component—electrical systems, cooling circuits, rack configurations, and energy distribution—explicitly for GPUs and high-density computation. Its collaboration with ABB on medium-voltage power systems enhances reliability and efficiency on a large scale. The significant project in progress is Polaris Forge 2 in North Dakota, a $3 billion, 280-MW campus currently under development and projected to become operational in early 2027.  Riding the AI Infrastructure Wave  Expenditures by Big Tech on AI infrastructure are skyrocketing: Microsoft, Amazon, and Meta are alone expected to invest over $380 billion in AI-related capital expenditures in 2025, and this amount is likely to exceed $500 billion by 2026. All this spending necessitates tangible compute capacity, and purpose-built data centers are becoming the critical bottleneck in the ecosystem.  MORE FOR YOU Applied is strategically situated within this gap. The company constructs, owns, and operates AI/HPC campuses while leasing essential power capacity (in megawatts) to hyperscalers through long-term agreements, ensuring it has highly predictable, multi-year revenue that scales with GPU demand. A prime instance of this is its partnership with CoreWeave. A $7 billion leasing agreement signed in June has been extended by an additional 150 MW at Polaris Forge 1, raising total contracted revenue to approximately $11 billion.  In addition to leasing, Applied is enhancing its service offerings via the Applied Digital Cloud, presenting GPU-as-a-Service to enterprises in need of high-performance computation without the responsibility of managing their own hardware. Through partnerships with Nvidia and Super Micro, Applied deploys cutting-edge GPU nodes optimized for AI and HPC workloads.  Valuation And Risks  Although Applied’s valuation is quite high, the company is expected to experience rapid growth as its new data centers become operational. See: APLD Valuation Ratios. The consensus anticipates around 38% revenue growth for 2026 and approximately 85% growth for 2027. As AI workloads increase dramatically, the demand for data centers tailored for GPU computation is surging, potentially enhancing profitability in the long term. The company’s multi-gigawatt capacity pipeline and dedicated anchor customers position it as a key beneficiary of this broad trend. APLD also represents a relatively small entity ($9 billion market cap) in an enormous, swiftly growing sector. Doubling its revenue/market cap is proportionally less challenging than for companies like NVDA (over $4 trillion) or AMZN (over $2 trillion).  Nonetheless, risks remain. Applied’s business is highly capital-intensive, with billions allocated to new campus developments, making the company susceptible to delays or cost overruns in execution. Its valuation is already high, leaving little margin for errors. Furthermore, the market for AI data center services increasingly competitive, with traditional hyperscalers and cloud providers expanding their own capabilities, which may compress margins or hinder customer acquisition.  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<p>Applied Digital's stock has surged nearly 22% in the last five days and is up 4x year-to-date, driven by trends in the AI sector and the completion of its first AI data center. Despite a $9 billion valuation and high trading multiples, investors question the sustainability of the rally amid capital-intensive operations and competitive pressures in the AI infrastructure market.</p>