APLD Stock Forecast & Price Target

Applied Digital Corp is experiencing significant revenue growth, evidenced by a 39% increase in High-Performance Computing (HPC) revenues, reaching $763 million compared to previous estimates of $547 million for FY28. The company's focus on expanding its data center hosting capabilities and addressing a substantial 4GW development pipeline further supports a promising financial trajectory, with potential revenues projected to reach approximately $250 billion annually between 2028 and 2030. Additionally, the strong performance in the first quarter of FY26, with total revenue surging to $64.2 million from $34.8 million in the prior quarter, underlines the company's strategic positioning and potential for continued financial success in the evolving digital infrastructure landscape.

The fundamental outlook for Applied Digital Corp's stock is concerning due to several key financial metrics and market dynamics. Gross margins have significantly fallen below expectations at 13%, primarily driven by elevated fit-out costs, which raises questions about operational efficiency and profitability. Additionally, macroeconomic headwinds, supply chain issues, and increasing competition in hosting services pose substantial risks, potentially exacerbating revenue pressures and undercutting margins for its primary customers, particularly in the cryptocurrency segment.