- Buy Core Scientific Over Applied Digital
May 15, 2026 · seekingalpha.com
Core Scientific (CORZ) offers a more attractive risk/reward profile than Applied Digital (APLD) due to its larger, immediately leasable power capacity and faster delivery schedule. CORZ is set to deliver 590 MW to CoreWeave over 12 months, with 243 MW already being billed and the remainder expected ahead of APLD's timeline. APLD's near-term upside is limited, with most capacity set for delivery further out, while trading at a premium 23x FY27 sales versus CORZ's 14x CY26 sales.
- Should You Hold APLD at 16.9x P/S? 3 Reasons Despite the Premium
May 14, 2026
Applied Digital APLD shares are overvalued, as suggested by a Value Score of F. The stock is trading at a premium, with a forward 12-month Price/Sales (P/S) of 16.98X compared with the Zacks Financial - Miscellaneous Services industry’s 3X and the Zacks Finance sector's 8.82X. Among its peers, RIOT Platforms RIOT and Equinix EQIX are trading at comparatively lower multiples of 13.43X and 10.1X, respectively.
The premium valuation reflects Applied Digital’s existing positioning within the AI infrastructure segment, though a meaningful portion of the longer-term narrative already appears reflected in the stock. The higher multiple largely stems from APLD’s growing hyperscale AI data center platform, expanding development pipeline and increasing exposure to long-duration infrastructure contracts tied to rising AI compute demand.
APLD’s P/S F12M RatioZacks Investment Research
Image Source: Zacks Investment Research
On a year-to-date basis, APLD shares have risen 85.4%, well above the sub-industry, which has declined 6.3%. RIOT Platforms has surged 96.6% while Equinix has advanced 40.6% year to date. APLD's outperformance reflects expectations surrounding its rapidly expanding hyperscale AI infrastructure platform and growing long-term revenue visibility.
APLD’s YTD PerformanceShutterstock
Image Source: Shutterstock
So how should investors approach APLD at this stage? Let's take a closer look.
AI Infrastructure Expansion Fuels Revenue Visibility for APLD
APLD's expanding campus portfolio is beginning to translate long-term lease commitments into visible recurring revenues. Revenues rose 139% year over year in the third quarter of fiscal 2026, driven by the first full quarter of base rent recognition from the operational 100 megawatt facility at Polaris Forge 1. Additional capacity at Polaris Forge 1 and Polaris Forge 2 is expected to ramp through fiscal 2027, supporting revenue diversification across multiple hyperscale customers.
Delta Forge 1 further extends the company’s development pipeline into a new geography. Following the separation of the cloud business into ChronoScale Corporation, APLD is increasingly focused on scaling its AI data center platform. With approximately one gigawatt of capacity across four actively marketed sites, the contracted revenue base has meaningful room to grow beyond the current $16 billion.
The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $395.4 million, up 83.48% year over year. The consensus loss estimate of 61 cents per share has widened by 9 cents over the past 30 days, reflecting near-term construction cost pressure. However, this represents an improvement of 23.75% over the fiscal 2025 loss, suggesting the platform's earnings trajectory remains directionally positive. RIOT Platforms and Equinix continue expanding AI and digital infrastructure capabilities as well, though APLD remains earlier in its hyperscale monetization cycle.
Story Continues
Applied Digital Corporation Price and ConsensusApplied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
Balance Sheet Strength Anchors APLD's Construction Phase
APLD ended the third quarter of fiscal 2026 with $2.1 billion in cash and equivalents against $2.7 billion in total debt, with no material maturities due within the next two years. The liquidity position provides flexibility to continue funding its ongoing campus buildout during a highly capital-intensive expansion phase.
The $2.15 billion Senior Secured Notes offering at 6.75% due 2031 funds Polaris Forge 2, while the $100 million DevCo Facility with Macquarie Equipment Capital supports Delta Forge 1 development costs. Access to $4.1 billion in preferred equity commitments from Macquarie Asset Management, contingent on executed investment-grade leases, preserves over 85% common equity ownership for shareholders at each new campus.
CoreWeave’s CRWV SPV tenant subsidiary securing an A3 credit rating also improved the credit profile attached to Polaris Forge 1 lease agreements. Over time, stabilized assets and improving financing structures could support lower borrowing costs, particularly as additional campuses begin contributing recurring lease revenues.
APLD Faces Customer Concentration and Execution Risk
Despite improving customer diversification, CoreWeave remains APLD’s largest hyperscale exposure and still accounts for roughly $11 billion of the company’s $23 billion in contracted lease revenues. While additional investment-grade hyperscaler agreements at Polaris Forge 2 and Delta Forge 1 have reduced concentration risk, dependence on CoreWeave remains an important factor to monitor.
APLD is simultaneously managing large-scale construction across multiple campuses, advancing utility agreements and pursuing lease negotiations across remaining development sites. Each workstream carries its own timeline risk, and a delay in any one of them could slow the revenue ramp the market is currently pricing in. Consistent delivery across a complex, multi-campus construction program remains the central variable that will ultimately determine whether the growth case plays out as projected.
Conclusion
Applied Digital remains well-positioned within one of the fastest-growing areas of digital infrastructure, supported by expanding hyperscale AI data center capacity, improving revenue visibility and sufficient liquidity to fund its ongoing construction pipeline. The company is executing against a large multi-campus opportunity set, though elevated valuation, customer concentration and execution risks continue limiting near-term upside visibility after the stock’s strong rally.
APLD currently carries a Zacks Rank #3 (Hold). Existing investors may consider maintaining their positions, while new investors could benefit from waiting for a more favorable entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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- Should You Hold APLD at 16.9x P/S? 3 Reasons Despite the Premium
May 14, 2026 · zacks.com
Applied Digital trades at a premium, but expanding AI data center capacity and $23B in contracted lease revenues keep growth expectations elevated.
- Applied Digital (APLD) Stock Continues To Rise As Company Gets Loan For North Dakota Data Center
May 14, 2026
Applied Digital Corp (NASDAQ:APLD) is one of the 7 Best Data Center GPU-as-a-Service Stocks To Buy. On April 28, John Todaro, an analyst at Needham, assigned a target price of $48 to Applied Digital Corp (NASDAQ:APLD) and maintained a Buy rating on the stock. Owing to the incredible stock performance over the last month, the stock is closing in on Needham’s price target. The firm’s price target still offers 16% upside from the current levels.Applied Digital Corp (NASDAQ:APLD) is one of the 7 Best Data Center GPU-as-a-Service Stocks To Buy.
On May 4, Applied Digital Corp (NASDAQ:APLD) announced the closing of a $300 million loan from Goldman Sachs, which can be repaid at any time without fees or penalties. This loan will be used to develop and construct the company’s third AI data center at its Polaris Forge 1 campus in Ellendale, North Dakota. The company expects to need additional financing to complete the project. The financing loan acts as a bridge facility with a 364-day maturity and bears interest at the Secured Overnight Financing Rate plus 275 basis points. Saidal Mohmand, Chief Executive Officer of Applied Digital, remarked,
"This financing supports the continued development of our third AI data center at Polaris Forge 1 and reflects our disciplined approach to funding projects in line with construction timelines."
Applied Digital Corp (NASDAQ:APLD) builds and operates digital infrastructure for AI and computing companies in North America. The company provides data centers and GPU computing solutions for businesses working in AI. It is headquartered in Dallas, Texas, and was founded in 2021 by Wes Cummins and Jason Zhang.
While we acknowledge the potential of APLD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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- IREN Trades at Premium Valuation: Buy, Sell or Hold the Stock?
May 13, 2026
IREN Limited IREN shares are currently trading at a high price-to-sales (P/S) multiple, far above the broader Zacks Finance sector and the Financial - Miscellaneous Services industry. IREN’s trailing 12-month P/S ratio sits at 25.04X, significantly higher than the Financial Miscellaneous Services industry’s 2.7X and the Zacks Finance sector’s 5.85X. The Zacks Value Score of F also suggests that the IREN stock is overvalued.
IREN’s elevated valuation raises concerns about whether the stock can justify such lofty multiples. Considering the premium valuation, investors must be wondering whether they should buy, hold or sell the stock, especially amid near-term challenges.
TTM 12-Month P/S RatioZacks Investment Research
Image Source: Zacks Investment Research
Lower Bitcoin Mining Revenues Weigh on IREN’s Prospects
IREN is experiencing near-term pressure on revenues as it moves away from Bitcoin mining and focuses more on AI cloud services. IREN’s focus on no longer being a pure-play crypto-mining company while evolving into an AI Cloud Service Provider means that the company will continue to see lower revenues from its bitcoin mining business on a quarter-on-quarter basis.
In the third quarter of fiscal 2026, total revenues fell 21.6% from the previous quarter. Management said that this drop was mainly due to lower Bitcoin mining revenues, which declined 33.6% on a sequential basis in the third quarter of fiscal 2026.
IREN is shifting power and infrastructure away from mining and toward AI workloads. AI cloud revenues are increasing, but they are not yet large enough to fully make up for the drop in mining revenues. Management said that this pressure should be temporary. As more GPUs are installed and AI cloud contracts ramp up, AI revenues are expected to become the main revenue source. Until then, quarter-over-quarter results for Bitcoin mining revenues may remain uneven.
Rising Impairment Charges Hurt IREN’s Prospects
Higher costs relating to the recognition of impairment charges on IREN’s Bitcoin mining hardware, as it shifts toward AI cloud infrastructure, continue to weigh on IREN’s prospects. In the fiscal third quarter, impairment charges amounted to $140.4 million, representing a sharp increase from $31.8 million in the prior quarter.
These impairments charges reflect the declining importance and value of IREN’s legacy mining business. IREN’s transition to AI cloud means that these charges are expected to continue in the near term due to which reported profitability may come under pressure in the upcoming quarters.
The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 25 cents per share, revised down by 29 cents over the past seven days.
Story Continues
IREN Limited Price and ConsensusIREN Limited Price and Consensus
IREN Limited price-consensus-chart | IREN Limited Quote
IREN Stock Faces Stiff Competition
While the AI data center market provides a strong growth outlook, solid competition from key players, such as Hut 8 Corp. HUT, TeraWulf WULF and Applied Digital APLD, multiplies competition for IREN.
Recently, Hut 8 signed a 15-year lease agreement for the first phase of its Beacon Point AI data center campus in Texas. The agreement covers 352 megawatts (MW) of IT capacity and has a base contract value of $9.8 billion. The transaction increases Hut 8’s total contracted AI data center capacity to 597 MW, with total base-term contract value reaching $16.8 billion.
In February 2026, TeraWulf announced the expansion of its digital and power infrastructure portfolio through the acquisition of two existing sites in Kentucky and Maryland. Together, these two acquisitions add 1.5 GW of power capacity to the company’s portfolio. WULF plans to add 250-500 MW of new contracted capacity each year, depending on customer demand and power availability.
In January 2026, Applied Digital announced that it had started construction on Delta Forge 1, a large AI data center campus in a southern U.S. state. Delta Forge 1 is designed to support up to 430 MW of total utility power in its initial phase. This can support up to 300 MW of critical IT load. Here, APLD’s goal is to turn available power into usable, high-density AI capacity for large customers and is designed to scale with customer demand while providing a reliable performance.
The above-mentioned factors seem to have weighed on investors’ sentiments, as reflected in the underperformance of IREN’s share price over the past six months. IREN shares have returned 21.6% over the past six months, underperforming its peers, Hut 8, Applied Digital and TeraWulf. Over the past six months, shares of Hut 8, Applied Digital and TeraWulf have surged 189.7%, 85.1% and 106.9%, respectively.
6-Month Price Return PerformanceZacks Investment Research
Image Source: Zacks Investment Research
Conclusion: Sell IREN Stock Right Now
IREN faces near-term risks from lower bitcoin mining revenues and rising impairment charges as the company moves away from Bitcoin mining to focus more on AI cloud services. Further intense competition in the AI infrastructure space from major players, such as Hut 8, Applied Digital and TeraWulf, is concerning for IREN, and a premium valuation warrants a cautious approach to the stock.
Currently, IREN carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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- Can NVIDIA Partnership Help IREN Reach $3.7B AI Cloud ARR Target?
May 12, 2026
IREN Limited IREN has entered into a major partnership with NVIDIA to strengthen its AI cloud business. The partnership was announced on the latest earnings call in the third quarter of fiscal 2026, where the company signed a $3.4 billion, five-year AI cloud contract with NVIDIA to deploy Blackwell GPUs across 60 megawatts of air-cooled capacity at its Childress campus in Texas. The above-mentioned contract should contribute around $700 million in annual recurring revenues (ARR).
IREN exited the third quarter with $3.1 billion in ARR under contract and reiterated its target of reaching $3.7 billion in ARR by the end of 2026. Here, growth is expected to accelerate in the second half of 2026 as additional GPU capacity comes online. As of now, all operational AI cloud capacity is already fully contracted, and demand for near-term GPU infrastructure remains higher than available supply, particularly for air-cooled AI capacity scheduled for deployment in late 2026 and early 2027.
To support this growth, IREN plans to expand AI cloud capacity to 480 megawatts through the deployment of 150,000 GPUs by the end of 2026. Further, IREN is converting its existing Bitcoin mining facilities in Texas and British Columbia into AI cloud infrastructure. Here, IREN's Horizon 1, a liquid-cooled data center at Childress, which will support liquid-cooled deployment for GPU commissioning for Microsoft, is already underway, while Horizons 2 to 4 remain on track for completion in 2026.
IREN’s financial results reflect its ongoing shift toward AI cloud services. AI Cloud Services revenues were $33.6 million compared with $17.3 million in the previous quarter, reflecting sequential growth of 94.2%. Here, strong AI infrastructure demand and rising contracted capacity are expected to continue supporting growth in IREN's AI cloud business. The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates revenue growth of around 93.8% and 191.8%, respectively.
IREN Stock Faces Stiff Competition
IREN faces intense competition from Applied Digital APLD and TeraWulf WULF in the AI infrastructure space.
In January 2026, Applied Digital announced that it had started construction on Delta Forge 1, a large AI data center campus in a southern U.S. state. Delta Forge 1 is designed to support up to 430 megawatts (MW) of total utility power in its initial phase. This can support up to 300 MW of critical IT load. The goal is to turn available power into usable, high-density AI capacity for large customers.
In February 2026, TeraWulf announced the expansion of its digital and power infrastructure portfolio through the acquisition of two existing sites in Kentucky and Maryland. Together, these two acquisitions add about 1.5 GW of power capacity to the company’s portfolio. With these additions, TeraWulf’s total platform size increases to about 2.8 GW across five sites. These acquisitions support TeraWulf’s strategy of reusing existing energy infrastructure to meet growing power and computing demand.
Story Continues
IREN’s Price Performance, Valuation & Estimates
Shares of IREN have surged 48.6% in the year-to-date period against the Zacks Financial Miscellaneous Services industry’s decline of 6.1%.
IREN YTD Price Return PerformanceZacks Investment Research
Image Source: Zacks Investment Research
IREN shares are overvalued, as suggested by the Value Score of F. In terms of forward price/sales, IREN is trading at 6.99X compared with the industry’s 3.0X.
IREN Forward 12 Months (P/S) ValuationZacks Investment Research
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 55 cents per share, revised up by a penny over the past seven days, and marking a substantial year-over-year increase.Zacks Investment Research
Image Source: Zacks Investment Research
Currently, IREN carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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- Can Investment in ChronoScale Unlock Additional Value for APLD?
May 12, 2026
Applied Digital's APLD investment in ChronoScale Corporation is emerging as an important extension of its broader AI infrastructure strategy. Following the separation of its cloud business, APLD retained approximately 97% ownership in ChronoScale, maintaining significant exposure to accelerated compute and GPU cloud markets while keeping its core operations focused on hyperscale AI data center development.
The ChronoScale structure gives APLD exposure to a different layer of the AI ecosystem beyond long-duration infrastructure leasing. While APLD's primary business centers on developing large-scale AI campuses for hyperscaler customers, ChronoScale operates within the GPU compute market, where enterprise AI adoption and generative AI workloads continue driving demand for accelerated computing capacity. This creates a potential additional monetization avenue tied to compute utilization rather than solely infrastructure-backed lease revenues.
The separation supports greater capital structure flexibility. By operating ChronoScale independently, APLD can continue scaling its infrastructure platform without absorbing the funding requirements and operating dynamics of a GPU cloud business onto its balance sheet. The company nonetheless retains substantial economic exposure through its majority ownership stake, preserving meaningful upside if demand for accelerated compute continues expanding.
That positioning could prove increasingly valuable as APLD works to lower its long-term cost of capital and transition project-level debt toward more favorable structures. The company completed a $2.15 billion senior secured notes offering during third-quarter fiscal 2026 while improving the credit quality of its CoreWeave-backed lease arrangements, ending the quarter with $2.1 billion in cash. A strengthening core balance sheet provides the financial foundation that makes the ChronoScale separation credible rather than merely structural.
However, the incremental value ChronoScale adds to APLD's investment case will ultimately depend on its ability to scale GPU utilization and customer growth within a competitive and rapidly evolving market.
APLD's Approach Compared to Peers
Unlike APLD, peers IREN Limited IREN and Nebius Group N.V. NBIS have pursued an integrated model, keeping GPU cloud capacity within their core infrastructure operations. IREN has been steadily expanding its AI cloud business while maintaining its data center and compute revenues within a single operating structure. Nebius similarly operates as a unified AI infrastructure and GPU cloud platform, targeting aggressive revenue growth in the near term.
While IREN and Nebius consolidate compute and infrastructure economics under one roof, APLD's structural separation of ChronoScale could offer investors greater transparency into each business's standalone earnings power, though it introduces execution complexity that neither IREN nor Nebius currently faces.
Story Continues
APLD’s Share Price Performance, Valuation & Estimates
Applied Digital’s shares have returned 81.1% year to date, while the broader Zacks Finance sector has inched up 0.1% and the Zacks Financial-Miscellaneous Services industry has plunged 6.1%.
APLD Stock’s PerformanceZacks Investment Research
Image Source: Zacks Investment Research
Applied Digital stock is trading at a forward 12-month price/sales of 16.69X compared with the industry’s 3X. APLD has a Value Score of F.
APLD’s ValuationZacks Investment Research
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 loss is pegged at 61 cents per share. Applied Digital reported a loss of 80 cents per share in the previous fiscal year.
Applied Digital Corporation Price and ConsensusApplied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
APLD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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- Can NVIDIA Partnership Help IREN Reach $3.7B AI Cloud ARR Target?
May 12, 2026 · zacks.com
IREN Limited's NVIDIA deal adds $700M ARR potential as the company ramps AI cloud capacity and targets $3.7B ARR by 2026-end.
- Can Investment in ChronoScale Unlock Additional Value for APLD?
May 12, 2026 · zacks.com
Applied Digital's ChronoScale stake expands its AI strategy beyond data centers, adding GPU cloud exposure as AI compute demand accelerates.
- Why ServiceNow (NOW) Is Expanding Control Over Enterprise AI Agents
May 10, 2026
ServiceNow, Inc. (NYSE:NOW) is one of the best data governance stocks to buy for AI compliance.
On May 5, 2026, ServiceNow, Inc. (NYSE:NOW) expanded AI Control Tower with capabilities to discover, observe, govern, secure, and measure AI systems, agents, and workflows across enterprise environments. The company said the platform now gives customers control across five dimensions, including runtime observability into AI agent behavior through Traceloop and security controls through Veza that extend identity governance, scoped permissions, and least-privilege enforcement to AI systems and agents. That is directly tied to the AI compliance theme because agentic AI creates a messy new control problem: enterprises need to know what agents exist, what data they can access, what actions they can take, and when they cross policy boundaries.Why Applied Digital (APLD) Is Scaling Its AI Factory Backlog With a New Hyperscaler Lease
The same day, ServiceNow launched Autonomous Security & Risk, integrating Armis and Veza to govern AI agents, identities, and connected assets. ServiceNow said Veza’s access graph helps map who or what has access, what that access allows, and how those permissions change, creating the traceability that auditors and regulators require.
ServiceNow, Inc. (NYSE:NOW) provides workflow automation, AI, security, risk, IT service management, and enterprise operations software.
While we acknowledge the potential of NOW as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
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