Applied Digital Corporation Common Stock (APLD)

FairStock Score: 28/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Mr. Market is excited about Applied Digital's AI data-center buildout. Revenue has exploded: in fiscal 2024 ended 2024-05-31 it was $136.6M; in fiscal 2026 ended 2026-05-31 it reached $611.3M, and the latest filed quarter, fiscal Q1 2027 ended 2026-08-31, showed $262.8M. That is torrid growth. But Graham would ask where the earnings are. The company lost $149.3M in fiscal 2024, $231.1M in fiscal 2025, and $184.3M in fiscal 2026. In the latest filed quarter, it lost $184.1M, or $0.82 per diluted share. Cash generation is worse: trailing free cash flow is -$2.8B, a -40.9% FCF yield against the $6.8B market cap. Debt-to-equity is 1.36, Altman Z-score is 0.97, and the FairStock Score is 28/100. None of that screams durable moat; it looks like a capital-hungry infrastructure race where pricing power and returns are unproven. At the 2026-10-13 close of $22.44, FairStock calculations show a 3.76 price-to-book and a negative P/E of -24.66. Beta of 5.73 shows how violently the market prices this story. There is real revenue momentum, and if AI demand remains strong, utilization and financing could eventually turn. But an investor who demands a margin of safety should note that losses have persisted for four years—the Lynch screen finds no category because of those losses. I would need evidence of positive net income, positive free cash flow, and lower leverage before calling this a business rather than a financing-dependent construction project.

In plain English: Applied Digital builds and runs data centers and computing services for artificial intelligence and crypto customers. Sales are growing very fast, but the company is still losing money and using a lot of cash, and it has borrowed heavily. At its 2026-10-13 price of $22.44, the stock looks expensive against those weak current profits and cash flow.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2027 10-Q (period ended 2026-08-31) · fiscal Q3 2026 10-Q (period ended 2026-02-28) · fiscal Q2 2026 10-Q (period ended 2025-11-30) · fiscal Q1 2026 10-Q (period ended 2025-08-31) · FY2026 10-K (period ended 2026-05-31) · FY2025 10-K (period ended 2025-05-31) · FY2024 10-K (period ended 2024-05-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer