Is Applied Digital Your Ticket to Becoming a Millionaire?

Core Viewpoint - Applied Digital (APLD) has experienced significant stock growth, rising 50% through February 3, 2026, and nearly 400% since the start of 2025, attracting investor interest in the AI sector [1][2]. Company Overview - Applied Digital builds and operates data centers for large clients, providing flexibility for AI hyperscalers who prefer an asset-light model [4]. - The company has identified areas in North Dakota and South Dakota with excess energy capacity, facilitating the construction of data centers in regions with favorable cooling conditions [6]. Growth Potential - Currently, Applied Digital has 700 megawatts under construction and is developing an additional 4.3 gigawatts, indicating substantial growth potential in the coming years [7]. - Wall Street analysts project a 61% revenue growth for fiscal year 2026 and 55% for fiscal year 2027, driven by increasing demand for AI computing power [10]. Financial Metrics - Applied Digital's current market capitalization is $9.8 billion, with a stock price of $34.95, trading at 32 times sales, which is considered expensive even for a software company [5][8]. - The company has a gross margin of 16.40%, but it currently does not have profits or projections for profitability [6][7]. Investment Considerations - Despite the growth potential, there are concerns about whether the current stock price reflects too much success already priced in, leading to uncertainty about the business model post-buildout [7][10]. - Comparatively, investing in hardware companies like Nvidia may present less risk while still capturing similar growth opportunities in the AI sector [12].