Up Nearly 300% Since 2025, Is Applied Digital Stock a Buy?

By Keithen Drury – Feb 27, 2026 at 5:00PM ESTKey PointsApplied Digital builds and operates data centers for artificial intelligence (AI) clients.The company expects monster growth over the next few years. Applied Digital (APLD 5.10%) has been one of the best stock picks over the past year. It has risen nearly 300% since 2025 began, but it has sharply sold off over the past few weeks. Now, it's down nearly 30% from its all-time high established in January. Applied Digital has been a great stock to own over the past few months, but is now the time to buy? I think it could easily bounce back, especially once the market gets its appetite for artificial intelligence (AI) investing back. Image source: Getty Images. AI is becoming out of favor Over the past few weeks, investors have really honed in on AI spending. They want to see a return on investment for all of the massive amount of capital being deployed to build out AI computing capacity. However, the reality is that a lot of that value is still being created and may take years to show up. Eventually, investors will get back on the AI bandwagon, and Applied Digital could be one of the stocks that skyrockets once that happens. Applied Digital is focused on building data centers in ideal locations that it rents out to various AI firms. It has several data centers already under construction and computing power available at a handful of sites. While it is generating solid revenue right now, the reality is that Applied Digital is a future growth story. ExpandNASDAQ: APLDApplied DigitalToday's Change(-5.10%) $-1.46Current Price$27.19Key Data PointsMarket Cap$8.0BDay's Range$26.08 - $27.7352wk Range$3.31 - $42.27Volume425KAvg Vol30MGross Margin16.40% During Q2 of fiscal year (FY) 2026 (ending Nov. 30, 2025), Applied Digital's revenue rose an impressive 250% year over year to $127 million. However, it posted a net loss of $31 million. That's because it's spending all of its resources to get its data centers up and running to capture market share that will print money for several decades. This is a smart strategy, and it will likely pay off in the end. But investors must be patient with the stock, as the market is often shortsighted compared to the long-term mindset you need to invest in a company like Applied Digital. If you value it using traditional valuation metrics like the price-to-sales ratio, it looks way overpriced at 26 times sales. APLD PS Ratio data by YCharts Wall Street analysts expect 61% revenue growth for the remainder of FY 2026 and 55% in FY 2027, so this valuation measure will come down, but it will take some time to do so. If you're bullish on the AI buildout and expect it to last for several years, Applied Digital could be a great buy right now. However, you'll have to be patient and deal with the ups and downs of the market, as it will take some time before Applied Digital's plans are fully accomplished.Read NextFeb 27, 2026 •By Johnny RiceApplied Digital's $16 Billion Pipeline Has a Hidden WeaknessFeb 21, 2026 •By John Ballard2 Monster Stocks to Hold for the Next 5 YearsFeb 20, 2026 •By Harsh ChauhanAI Spending Is Poised to Hit $700 Billion in 2026. 2 Top Stocks to Buy to Capitalize on This Massive Number.Feb 9, 2026 •By Keithen DruryIs Applied Digital Your Ticket to Becoming a Millionaire?Feb 8, 2026 •By Johnny RiceShould You Buy Applied Digital Stock Right Now?Feb 8, 2026 •By Rick OrfordCould Applied Digital Be the Most Undervalued Stock Right Now?About the AuthorKeithen Drury is a contributing Motley Fool technology analyst covering AI, semiconductors, cybersecurity, and SaaS stocks. In addition to The Motley Fool, Keithen is a mechanical engineer and has held roles at Honeywell and smaller industrial companies like Brand Hydraulics and Lincoln Industries. He holds a bachelor’s degree in mechanical engineering from Dordt University.TMFTripleOptionStocks MentionedApplied DigitalNASDAQ: APLD$27.27(-4.82%)-$1.38*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.