Applied Digital: Gigawatt Ambitions Clouded By Related-Party Transactions

Emanuel Nemec565 FollowersFollow5ShareSavePlay(8min)Comment(1)SummaryApplied Digital is pivoting to AI data centers, capitalizing on low vacancy rates and strong sector demand.APLD’s secured leases could generate $1.07B annually, with potential upside from 1.1 GW unleased pipeline capacity.Valuation projects $2.83B in 2029 revenues; a conservative 5x PS multiple implies 100%+ upside from current levels.Issuing a 'Hold' rating due to uncertainties around electricity pricing and execution risks with the Base Electron partnership. Eoneren/E+ via Getty Images This is my first coverage of Applied Digital Corporation (APLD). In recent articles, I have explored other crypto miners pivoting to HPC, like IREN Limited (IREN), MARA Holdings, Inc. (This article was written byEmanuel Nemec565 FollowersFollowI first entered investing in 2016 as an individual value investor. In 2022, I established the investment firm Libra Capital. I mostly write articles as part of my deep research into a company before I make an investment, whether long or short. For me, a ''hold'' article means neutral; don't touch the stock and exit a position if you have one. Sell is short it, or sell a long position, and vice versa for long.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.