Highlights to Note
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Applied Digital is set to reap the benefits from the increasing demand for data center capabilities.
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The current trading value of the stock is merely 10 times the expected operational profit over the next five years.
Remember a few years back when chip shortages for companies diving into artificial intelligence (AI) were all the rage? Well, those issues are mostly behind us now. What’s troubling many is the challenge of securing electricity for new data centers.
This presents an exciting opportunity for firms like Applied Digital(NASDAQ: APLD), whose stock has seen an astounding rise of over 300% in 2025.
If you’ve got some money that you can slot into a long-term investment, this stock could really pay off.
Why Consider Buying Applied Digital?
Recent findings from Morgan Stanley reveal a staggering shortfall of 47 gigawatts in electricity sources for data centers anticipated in the coming years. Applied Digital is currently operating out of two sites in North Dakota, with further projects in the pipeline. At present, they’re generating 286 megawatts at their North Dakota campus, with grand plans to eventually reach a total of 4 gigawatts in development.
While Applied Digital is only offsetting a small segment of that projected energy limited, the high demand presents immense revenue potential for the business.
In the last quarter, the company reported an impressive 84% jump in year-over-year revenue. They’ve secured a multi-billion-dollar partnership with CoreWeave and are having ongoing discussions with other major players in the field.
Every megawatt generated at data center facilities can be valued at several million dollars. The agreement with CoreWeave is projected to elevate Applied Digital’s annual operating profit towards $500 million, with the potential to double that to $1 billion in the near term through further agreements. Despite its current market cap of nearly $10 billion, this conservative valuation implies that investors could see their money greatly multiply over the next ten years.
Is Now the Right Time to Invest $1,000 in Applied Digital?
Before jumping aboard with Applied Digital, it’s important to weigh your options:
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John Ballard currently holds no shares in any mentioned companies. The Motley Fool likewise has no positions in any of them. Check out their disclosure policy for more on that.
