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Let's be real for a second. Every few years, Wall Street finds a new magic word. A few yea... Let's be real for a second. Every few years, Wall Street finds a new magic word. A few years ago it was "blockchain." Before that, "cloud." Now, the magic word is "AI." You just whisper it into a microphone during an earnings call and watch your stock price defy gravity. And right now, nobody is whispering it louder than Applied Digital (APLD).
You've seen the headlines. If You'd Invested $10,000 in Applied Digital (APLD) Stock 3 Years Ago, Here's How Much You'd Have Today (Spoiler: You Could Buy a Fancy New Car!). A 1,345% gain. Your cousin who bought it on a whim won't shut up about it at Thanksgiving. The story they're selling is simple: Applied Digital is building the high-tech barns—they call them "data centers"—for the artificial intelligence gold rush. They signed an $11 billion deal with AI darling CoreWeave, and they're breaking ground on a new $3 billion campus in North Dakota.
It all sounds incredible. Visionary, even. But when I see a company that was called "Applied Blockchain" just a few years ago suddenly become an AI messiah, my BS detector starts screaming.
Same Circus, Different Clowns
You have to appreciate the hustle. Back in 2021, this company was Applied Blockchain, trying to cash in on the crypto craze. Now, with crypto in the gutter, they’ve conveniently rebranded to Applied Digital and are all-in on AI. This isn't a "pivot." It's a costume change.
This is like a surfer who completely missed the crypto wave, nearly drowned, and is now paddling like hell to catch the front edge of the AI tsunami. They're up and riding for now, looking like a pro to everyone on the beach. But are they actually a master of the waves, or just a lucky amateur who's one wobble away from a spectacular wipeout? Because from where I'm sitting, they're just chasing the next big swell, hoping it doesn't crash down on them.
They boast about their "Polaris Forge" campus, a 1 GW behemoth with proprietary waterless cooling. They won an award for "Best Data Center in the Americas." This is all great PR. I get it. It reminds me of all the dot-com companies that had the coolest office furniture and the best launch parties right before they went to zero. Awards don't pay the bills. Revenue does. And right now, their revenue is dwarfed by their net losses—a cool $161 million last year. That ain't a sustainable business model, it's a prayer funded by shareholder dilution.
The $11 Billion Asterisk
Okay, let's talk about the big number: $11 billion in contracted revenue from CoreWeave over 15 years. It’s the entire bull case for the stock, the reason people are tripping over themselves to buy shares at all-time highs. But that number comes with a giant, flashing, neon-red asterisk.
Customer concentration.
Putting all your eggs in one basket is a bad idea when you're selling eggs. It's a catastrophic idea when that basket is a fast-moving, high-burn AI startup in the most volatile sector on the planet. What happens if CoreWeave, which is reportedly burning through cash to fund its own NVIDIA-backed growth, stumbles? What if they find a cheaper, better, or faster data center partner in five years? A 15-year contract is only as good as the company that signs it. Are we really betting the farm that CoreWeave will be a dominant, thriving hyperscaler in 2040?
And how is Applied Digital funding this massive expansion? By selling stock. Constantly. They raised over $260 million after the fiscal year ended, and then immediately filed to sell another $200 million worth. They're building these AI palaces with your money, diluting your ownership with every press release. They're building a second $3 billion campus, Polaris Forge 2, without even having a main tenant signed on yet. This is a brilliant strategy. No, 'brilliant' is what their PR team wants you to think—it's a monumentally risky "if you build it, they will come" gamble.
I have to wonder, where does the accountability lie? The CEO, Wes Cummins, believes they can hit $1 billion in operating profit in a few years. Offcourse he does. What else is he going to say? But that projection requires flawless execution, no construction delays, no cost overruns, and a steady stream of new hyperscale clients who are willing to sign decade-long deals. Does that sound like a sure thing to you?
This All Feels a Little Too Familiar
Look, I'm not saying Applied Digital will definitely fail. The demand for AI data centers is very real. The power shortage is a real problem, and their move to secure power in North Dakota was genuinely smart. They might actually pull this off and become the next great infrastructure story, the digital equivalent of the guys who sold shovels during the Gold Rush.
But the hype has gotten way, way ahead of the reality. The stock is trading on promises of 2028, not on the performance of 2025. We're seeing a narrative that looks a lot like the narratives around `tsla stock` or `nvda stock`—a story so good people are willing to ignore the messy financials and the glaring risks. The market is pricing this thing for perfection, and perfection is a rare commodity.
They're about to report earnings on October 9. Analysts expect another loss. The numbers will be scrutinized, every word on the investor call will be parsed. Maybe they'll announce that mystery hyperscaler for Polaris Forge 2 and the stock will double again. Or maybe they'll report a slight delay, a minor cost overrun, and this whole beautiful bubble will pop. When a stock's story is this good, it doesn't take much to spoil it. And honestly, for a company that changes its entire identity based on what's trending on Twitter...