So, another day, another stock you’ve never heard of is suddenly the messiah of the AI revolution. This time, the lucky winner is Applied Digital, ticker APLD. The stock just rocketed to a four-year high, and the internet’s losing its collective mind. Everyone from Wall Street suits to the meme-stock crowd on Stocktwits is convinced this is the next big thing.
And me? I’m just sitting here watching the fireworks, wondering when everyone decided that basic math was optional.
Let’s be real. The company designs and runs "next-generation digital infrastructure." That’s a fancy, twenty-dollar way of saying they build data centers—the digital plumbing for the AI gold rush. And because they’ve got "AI" in their business plan, investors are throwing money at them like they’re the only ones selling shovels. The stock is up over 250% this year. It’s a hell of a story. The only problem is, the story doesn't quite match the numbers.
You can’t have a good stock bubble without a few Wall Street analysts fanning the flames, and a recent Applied Digital Stock (APLD) Rallies on Bullish Analyst Update is a perfect example. Enter Roth Capital, which just jacked up its price target on APLD from $24 to a staggering $43. A forty-three dollar price target. That’s not just bullish; that’s a level of optimism usually reserved for lottery winners and people on their third margarita. Not to be outdone, Compass Point is slapping a "Buy" rating on it, too.
This is the part of the cycle where the professionals give the retail crowd permission to go nuts. And boy, are they ever. With news that the APLD Stock Surges To Nearly 4-Year Highs Ahead Of Q1 Results, message volume on Stocktwits is through the roof, and sentiment is overwhelmingly bullish. It’s a classic feedback loop: the stock goes up, so people talk about it, which makes the stock go up more. It’s like a perpetual motion machine powered by pure, uncut hope.
But what are these price targets actually based on? The analysts point to things like a lease deal with CoreWeave and the potential for another big deal at their new Harwood site. Potential. A word that does a lot of heavy lifting in press releases. It’s like promising your date a trip to Paris. It sounds amazing, but right now, you’re just holding a brochure. Are these analysts seeing a guaranteed future, or are they just creating a self-fulfilling prophecy to make sure their clients can cash out at the top? I mean, who really benefits when a stock price detaches from reality like this?
This all feels a little too familiar, don't you think? We saw this with crypto, we saw it with meme stocks, and now we’re seeing it with anything that has the letters "A" and "I" in its vicinity. It’s a great party until the music stops, and then everyone looks around for a chair that isn't there.
Here’s the part of the story that somehow gets buried under all the breathless headlines. Applied Digital is scheduled to report its Q1 earnings on October 9. And what are analysts expecting? A loss of $0.15 per share on about $47 million in revenue.
Let me repeat that. They are expected to lose more money on less revenue than they did in the same quarter last year. Last year, they lost $0.03 per share on over $60 million in revenue. So the business, by these metrics, is going in the wrong direction. This is a bad sign. No, 'bad' doesn't cover it—this is a five-alarm dumpster fire of a financial projection.
And yet, the stock is at a four-year high.
Make it make sense. Please. Are we supposed to believe that a company whose financials are getting worse is somehow worth 250% more than it was at the start of the year? The whole bull case seems to be pinned on the hope that they’ll land a massive contract for a facility that’s still being built. The company is essentially a rocket ship being sold to the public while the engineers are still trying to figure out if the fuel tank will hold. Offcourse it'll be fine, right?
It’s just another symptom of the great AI rebranding craze. Every tech company with a pulse is scrambling to pivot its narrative. Got a cloud storage business? It’s now an "AI infrastructure provider." Selling enterprise software? It’s an "AI-powered workflow solution." It’s the same stuff in a different box, but the new box has a magical sticker on it that doubles its value. It reminds me of my landlord trying to justify a rent hike by calling our ancient apartment building a "vintage urban living experience." Give me a break.
The hype is so thick you can’t see the balance sheet anymore. This is the part where everyone gets rich on paper, and then…
Then again, maybe I’m the crazy one. I probably said something similar about NVIDIA when it was a fraction of its current price, and look how that turned out. Maybe the future really is so bright that today’s profits just don’t matter. But that feels less like an investment thesis and more like a prayer.
So what's the real story here? You’ve got a company with deteriorating short-term financials being valued as if it's already conquered the world. The gap between the hype and the reality is wide enough to drive a truck through. This pre-earnings rally feels less like smart money getting in early and more like a crowded casino where everyone is betting on the same number. Maybe it hits. Or maybe the house cleans everyone out. Either way, this ain't investing; it's a high-stakes gamble on a story that hasn't been written yet.
