Applied Digital’s $36 Billion Backlog Meets a Valuation Puzzle as Earnings Loom
Published on 07/22/2026 at 17:33 | Redaktion boerse-global.de
Applied Digital finds itself at a curious crossroads. The AI infrastructure provider has locked in roughly $36 billion in contracted leasing revenue, HSBC has quietly boosted its stake by 6.2 percent, and the company just completed the first phase of a second building at its Polaris Forge 1 site, adding 75 megawatts of capacity to bring the campus total to 175 megawatts. Yet the stock has shed nearly a third of its value over the past month, and a nagging question persists: why does a tenant with a smaller, more volatile revenue base trade at a far richer multiple than its own largest customer?
The answer, for now, is a blend of contractual certainty and speculative uncertainty. Applied Digital’s order book — which now exceeds one gigawatt of contracted capacity across all locations — provides unusual cash-flow visibility for a company still in its rapid-expansion phase. Those long-term leases with hyperscale clients give institutional investors a reason to look past the near-term volatility. HSBC now holds 1,240,239 shares, and institutional ownership overall stands at roughly 65.67 percent of outstanding equity.
But the stock’s recent trajectory tells a different story. Shares closed at €26.18, down 0.30 percent on the day, and sit 23.67 percent below their 50-day moving average of €34.30. The decline accelerated sharply over the preceding weeks — the stock plunged 43 percent in a single month — before a 7.62 percent bounce on Tuesday brought it to €26.26. That rebound was part of a broader recovery among former crypto miners and AI infrastructure names: IREN jumped 17 percent, and TeraWulf added 7 percent. Analysts characterize the move as a technical counter-rally rather than a trend reversal, noting that the relative strength index had fallen to around 26 — deep in oversold territory — before the bounce.
The valuation debate has been sharpened by a direct comparison with CoreWeave, the company that actually leases Applied Digital’s data centers to run its own AI workloads. CoreWeave’s revenue has roughly quintupled over eight consecutive quarters, with steady sequential growth. Applied Digital’s top line, by contrast, has been far more uneven, even if it accelerated sharply in the most recent period. Yet the smaller, more volatile revenue generator carries a price-to-sales multiple of 21, while CoreWeave trades at roughly six times sales — a near-record discount for the larger firm.
Should investors sell immediately? Or is it worth buying Applied Digital?
On raw numbers, Applied Digital can make a compelling case. Revenue in the fiscal third quarter surged 139 percent year over year to $126.6 million, crushing the consensus estimate of $77.11 million. The company also delivered earnings per share of $0.09, against analyst expectations of a $0.17 loss — the seventh consecutive earnings surprise. But both companies carry heavy debt loads that have spooked investors, and Applied Digital’s debt-to-equity ratio stands at 1.65. To fund the fourth building at Polaris Forge 1, the company recently placed a $1.59 billion secured note.
The expansion strategy is capital-intensive by design. Applied Digital is pursuing an “AI factory” model — specialized data centers built for the most power-hungry AI workloads — and the completion of the second building’s first phase at Polaris Forge 1 keeps that timeline on track. The company has now surpassed one gigawatt of total contracted capacity across all sites, a milestone that underpins the $36 billion backlog.
Chart watchers see a stock trying to stabilize after heavy selling pressure. The RSI’s oversold reading has drawn in both retail and institutional buyers, but the technical picture remains fragile. The stock trades roughly 24 percent below its 50-day average and nearly 40 percent below its 52-week high of €43.48. Key levels to watch: resistance around $29 and support near $24.
Applied Digital at a turning point? This analysis reveals what investors need to know now.
The next major catalyst arrives at the end of July, when Applied Digital reports results for its fiscal fourth quarter and full year ending May 31, 2026. The earnings call will be closely watched for updates on debt management, the pace of expansion at sites like Delta Forge 2, and whether the company can sustain its streak of beating expectations. TV commentator Jim Cramer recently said he likes the stock at these lower levels but advised investors to “start small, not big,” given that the company continues to post losses.
If the coming numbers confirm that the leasing-driven growth story is accelerating, the valuation premium over CoreWeave may find a rational basis. If operational progress lags behind the contracted capacity, the comparison with a larger, faster-growing rival could add to the pressure. Either way, Applied Digital enters its earnings report with a $36 billion backlog as a shield — and a 21-times-sales multiple as a target.
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Applied Digital Stock: New Analysis - 22 July
Fresh Applied Digital information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
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