{
  "@context": "https://orbyd.app/schemas/dossier.v1.json",
  "ticker": "APLD",
  "name": "Applied Digital Corporation",
  "url": "https://orbyd.app/dossiers/APLD/",
  "json_url": "https://orbyd.app/dossiers/APLD.json",
  "status": "WATCHLIST",
  "current_conviction": "LOW",
  "graded_conviction": "LOW",
  "archetype": {
    "code": "a4",
    "n": 4
  },
  "current_thesis": "BTC→AI landlord whose operating build (>1 GW contracted, ~$31B backlog, 175 MW live) has decoupled from an equity that halved from $49.65 to a $25.79 low, now bouncing off the $25.56 April base into a binary FY26 print on 2026-07-27. Morgan Stanley's cautious $36.50 Equal-Weight initiation lands the day before. Stand aside into the print.",
  "invalidation_trigger": "A weekly close below $25 loses the $25.56 April base floor and opens the $20 zone; secondary breaks: an ATM reactivation or equity raise disclosed on or after the 2026-07-27 FY26 call, a Polaris Forge lease cancellation, or a CoreWeave counterparty downgrade.",
  "catalyst_date": "2026-08-11",
  "outcome": "INVALIDATED",
  "outcome_date": "2026-04-29",
  "invalidation_fired": true,
  "themes": [
    "gpu-cloud-neoclouds"
  ],
  "tags": [
    "watchlist"
  ],
  "sources": [],
  "notes": [
    "2026-04-19: Applied Digital — BTC→AI pivot (less proven than IREN but same thesis)",
    "Fiscal year ends May 31: the \"Q4 FY26\" reported 2026-07-27 covers the quarter ended 2026-05-31, so calendar-quarter comparisons to peers run one month offset.",
    "GAAP and adjusted results diverge widely: FY26 adjusted net income was $36.1M against a GAAP net loss of $249.2M.",
    "NOI is a non-GAAP measure stated before interest and depreciation: FY26 NOI of $90.4M sits against $5,100M of total debt at 2026-05-31.",
    "Applied Digital retains roughly 96-97% of ChronoScale (Nasdaq: CHRN) after the 2026-05-05 cloud-services separation; CHRN is consolidated, so it is not a clean spin-off.",
    "The three largest leases (810 MW, about $20.2B of base-term revenue) are with one unnamed \"high investment-grade hyperscaler\" the company has not identified.",
    "Reported five-year beta is 5.77; single-session moves above 6% are routine — -12.77% on 2026-07-29, +20.46% on 2026-07-30, +6.04% on 2026-08-04."
  ],
  "body_markdown": "\n> Coverage note: this advances existing coverage of Applied Digital first published 2026-04-19 and last updated 2026-08-04.\n\n## APLD — Applied Digital Corporation\n\n## Current Thesis\n\nThe drawdown low is now dated. APLD closed $23.22 on 2026-07-29, down 12.77% in the session after a record fiscal-2026 print, and that close cut below the shelf the equity had defended all spring. It held for one day. The stock gained 20.46% to $27.97 on 2026-07-30 as Microsoft disclosed $41B of fiscal Q4 capex, added 7.67% on 2026-08-03 on B. Riley's target raise to $75, and closed $31.27 on 2026-08-04, up 6.04%. July's monthly low of $22.93 now marks the floor of a decline that began at the $50.73 May high.\n\nThe leg an investor is buying is conversion of a signed book into collected rent. The FY26 Form 10-K filed 2026-07-29 puts contracted critical IT load at approximately 1,410 MW across five campuses carrying about $36.2B over initial 15-year base terms, against 175 MW energized. Management put a gradeable number on the gap: FY26 net operating income of $90.4M, Q4 NOI of $39.9M at a 91% margin on base rent, and roughly $1B of annualized NOI expected within about a year. Q4 revenue of $258.7M included $152.4M of one-time tenant fit-out fees; the recurring data-centre rental line was $50.6M.\n\nWhat has changed since the last update is who is doing the buying. The three sessions that lifted the stock from $23.22 to $31.27 carried no company disclosure — the investor-relations press-release page lists nothing after the 2026-07-27 results\n\n**Life-cycle: MATURING.** New sell-side coverage is still arriving — Morgan Stanley initiated 2026-07-23, Needham reiterated $83 on 2026-07-28, B. Riley lifted to $75 on 2026-08-03 — so the name is not late-cycle in the coverage sense. But the newest initiation landed at $36.50, the bottom of an eleven-analyst range averaging $74.14, and the marginal bid arrives on hyperscaler and cohort headlines rather than on Applied Digital's own filings. It is not SATURATED while a peer print can add 20% in a session; it is not DEAD while the post-print flush was reclaimed inside one day and the backlog grew from roughly $31B in late May to $36.2B in the 10-K.\n\n## Bull Case\n\n- Backlog expanded through the entire drawdown: approximately 1,410 MW of contracted critical IT load across five campuses, about $36.2B over initial 15-year base terms (FY26 10-K, filed 2026-07-29), against roughly $31B carried when the shares traded at the 2026-05-28 high of $49.65.\n- The fiscal Q4 beat was operational, not optical: revenue $258.7M against consensus near $94.8M, adjusted EPS $0.04 against a $(0.22) estimate, adjusted EBITDA $42.4M; FY26 revenue $611.3M, up 167% (2026-07-27 release).\n- Conversion carries a stated, checkable target — FY26 NOI $90.4M, Q4 NOI $39.9M at a 91% margin, and approximately $1B annualized NOI expected within about a year (2026-07-27 call).\n- Counterparty quality is visible in the debt cost: $2.15B of Polaris Forge 2 senior secured notes at 6.750% due 2031, inside the 7.000% due 2031 coupon on the $1.59B APLD ComputeCo 3 tranche that funds 150 MW at ELN-04.\n- The failed breakdown is structure rather than sentiment: the 2026-07-29 close of $23.22 broke the spring shelf and was fully reversed by the 2026-07-30 close of $27.97, with the July month closing at $27.39.\n- Every published target sits above the market. The eleven-analyst set as of 2026-08-03 runs $36.50 low, $74.14 average, $109 high, against a $31.27 close.\n\n## Bear Case\n\n- The capital gap is the whole story: total debt rose to $5,100M at 2026-05-31 from $2,827M at 2026-02-28 in a single quarter, cash stood at $1,592M, and shareholders' equity fell to $1,725M from $2,567M.\n- Dilution keeps arriving from multiple directions. Shares outstanding were 291,469,112 at 2026-07-28, up 36.78% year over year, and 3,045,000 PSU shares vested on 2026-07-31 on top of that count.\n- GAAP and adjusted results diverge by a quarter of a billion dollars: FY26 adjusted net income $36.1M against a GAAP net loss of $249.2M.\n- 175 MW energized against approximately 1,410 MW contracted means most of the $36.2B is a construction schedule, and the Polaris Forge 3 electric service agreement with Montana-Dakota still awaits North Dakota Public Service Commission approval.\n- Counterparty concentration is unusual: the three largest leases, 810 MW and about $20.2B of base-term revenue, sit with one unnamed \"high investment-grade hyperscaler\" the company has not identified.\n- The equity did not reward its own best quarter. The 2026-07-27 record print produced +0.93%, then -12.77% the next day; the 20.46% session came three days later on Microsoft's capex disclosure.\n\n## Setup & Price Structure\n\nAPLD closed $31.27 on 2026-08-04, market cap $9.11B, inside a 52-week range of $12.35–$50.73. Both major averages sit overhead: the 200-day at $32.59 and the 50-day at $36.87. Reclaiming $32.59 on a closing basis is the first structural step available; until then the advance off $23.22 is a rally inside a downtrend that began at the $50.73 May high.\n\nJuly's monthly bar frames the range that matters: open $25.37, high $37.42, low $22.93, close $27.39. The $27.39 monthly close doubles as the weekly close that survived the post-print flush, which makes it the level where the reversal would be surrendered.\n\nPositioning reads crowded on the short side and uncommitted on the long side. Short interest is 69.87M shares — 26.13% of a 267.44M float, 23.97% of shares outstanding, 3.65 days to cover. Institutional ownership is 66.67%; Vanguard's Schedule 13G/A filed 2026-07-31 reports 13,768,802 shares, 4.81% of class, as of 2026-06-30, with sole dispositive power over the full holding. Reported five-year beta is 5.77.\n\nCrowding observables cut both ways. Price is below both moving averages, so there is no extension above a rising average to unwind. Against that, Benzinga ran three mover-explainer pieces on the name in five sessions (2026-07-29, 2026-07-30, 2026-08-03), the insider vesting cluster and Form 144 landed on 2026-08-04, and volume declined on each successive up session of the advance. No company earnings sit inside the next 30 days — fiscal Q1 2027 does not end until 2026-08-31.\n\n## Catalyst Calendar (next 30 days)\n\n- **2026-08-11** — CoreWeave (CRWV) Q2 2026 results and call, 5:00 p.m. ET. CoreWeave is a named lessee at Polaris Forge 1 and the Building 4 lease assignment memorandum is conditioned on a CoreWeave subsidiary reaching investment grade.\n- **2026-08-14** — Q2 2026 13F deadline, covering positions as of 2026-06-30.\n- **2026-08-26** — Nvidia Q2 fiscal 2027 results, quarter ended 2026-07-26, call 5:00 p.m. ET. The 07-30 and 08-03 advances were authored by other companies' capex commentary; this is the next cohort input capable of moving APLD without company news.\n- **2026-08-31** — Fiscal Q1 2027 quarter end (fiscal year ends May 31). First full period after the $152.4M of Q4 tenant fit-out fees, so it sets the recurring rent base against the ~$1B NOI run-rate claim.\n- **~2026-08 to 2026-09 (est.)** — Construction financing for Delta Forge 1 and Polaris Forge 3, 300 MW each. Prior rounds cleared at 6.750% and 7.000%.\n- **~2026-08 to 2026-12 (est.)** — North Dakota PSC ruling on the Montana-Dakota electric service agreement for Polaris Forge 3, gating power for a 430 MW campus targeted for initial operations in August 2027.\n\n## What Would Change Our Mind\n\nThe reversal off the 2026-07-29 close of $23.22 is the only thing separating this from a broken chart, and it is one week old. Surrendering the $27.39 July monthly close would put the July low of $22.93 back in play and re-open the range beneath it: **a weekly close below $27** ends the recovery leg.\n\nThree non-price conditions would do comparable damage. First, a marketed common equity offering or ATM reactivation disclosed alongside the Delta Forge 1 or Polaris Forge 3 construction financing — the last two tranches cleared at 6.750% and 7.000%, and equity in place of debt would say the credit window narrowed. Second, CoreWeave's 2026-08-11 call or a rating-agency action indicating the investment-grade path underpinning the Polaris Forge 1 Building 4 assignment has stalled. Third, the cohort advancing on Nvidia's 2026-08-26 print while APLD fails to participate, which would date the name's underperformance against the group that has been carrying it.\n\nOn the other side, a close above $32.59 that holds would reclaim the 200-day and turn the argument structural rather than tactical.\n\n## Correlation Notes\n\n- The name trades as part of the neocloud/AI-datacentre cohort. IREN closed $40.85 on 2026-08-04, up 2.77%, against APLD's $31.27 and +6.04% the same session; IREN's own 52-week range is $15.49–$76.87.\n- Hyperscaler capex guidance is the dominant input. Alphabet raised 2026 capex guidance to $195–205B from $180–190B on 2026-07-22 with record Q2 capex of $44.9B; Microsoft reported $41B of fiscal Q4 capex on 2026-07-30 and pointed to roughly $190B of calendar-2026 spend. Both moved APLD more than its own earnings did.\n- CoreWeave is a double exposure — a correlated cohort name and a lessee whose credit rating gates a lease assignment. A CRWV derating transmits through sentiment and through counterparty risk at once.\n- Residual bitcoin beta persists: 286 MW of hosting capacity across two North Dakota sites still sits inside an AI-infrastructure story.\n- With 66.67% institutional ownership and Vanguard at 4.81%, index and passive flows are a meaningful share of the register; the 2026-08-14 13F deadline is the next look at the active side of it.",
  "first_seen": "2026-04-19",
  "last_analyzed": "2026-08-05T06:03:41+00:00",
  "last_synthesized": "2026-08-05",
  "last_update_source": "theme_discovery",
  "license": "Content © orbyd. Cite the canonical URL."
}