Applied Digital: A Most Curious Speculation

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Applied Digital: A Most Curious Speculation

It hath come to pass that the firm formerly known as Applied Blockchain, a title redolent of speculative bubbles past, now styles itself Applied Digital. A rebranding, you see, as if a change of nomenclature could alter the fundamental nature of fortune’s wheel. They deal now in the infrastructure of artificial intelligence, a realm where promises are as plentiful as the electrons that power it. One might observe, with a touch of irony, that they’ve traded one form of intangible asset for another.

The company, in these last three years, hath experienced a rise most prodigious – a 1,720% ascent, to be precise. A feat, I confess, that would make even the most seasoned alchemist envious. Much of this bounty stems from an accord with CoreWeave, a hyperscaler of considerable appetite, promising revenue of some eleven billion dollars. A second agreement hath since been struck, compounding the potential riches. It is a spectacle, truly, though one must always inquire: doth the gold glitter with true substance, or merely the sheen of expectation?

And now, the question arises, whispered amongst the financial cognoscenti: will Applied Digital cleave its shares, dividing the whole into smaller portions? A most curious notion, driven, not by the company’s inherent virtue, but by the whims of the market. A stock split, you see, is a maneuver designed to placate the multitude, to make the price more accessible to those of lesser means. As if a smaller number attached to a share could somehow alter its true worth. A folly, I say, akin to rearranging the deck chairs upon a ship destined for the shoals.

Upon the Matter of Dividing Shares

A company, when its shares reach a lofty price, doth risk excluding those who possess but modest fortunes. A share priced at two thousand dollars, for instance, is beyond the reach of many. Thus, a split is enacted, multiplying the shares while diminishing their individual value. Twenty shares at one hundred dollars each, they reason, are more palatable than a single share at two thousand. Applied Digital’s shares, at present, remain within reasonable bounds, trading beneath forty dollars. Therefore, a split at this juncture would be a gesture of vanity, a theatrical flourish devoid of practical purpose.

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One suspects, therefore, that no such division shall occur in the immediate future. Nor, indeed, a reverse split, wherein the number of shares is diminished to artificially inflate the price. Such maneuvers are the province of desperation, and Applied Digital, for the moment, doth not appear to be in such a state.

A Realm of Artificial Intelligence and Northern Chill

The demand for infrastructure supporting artificial intelligence is, without question, considerable. And Applied Digital, with its campuses situated in the frigid landscapes of North Dakota, appears well-positioned to capitalize upon this fervor. The state, it is said, boasts the second-lowest energy rates in the nation, and the cold climate doth reduce the costs of cooling these power-hungry data centers. A shrewd calculation, one must concede, though it doth remind one of building a palace upon a foundation of ice.

Beyond the accord with CoreWeave, they have also secured a fifteen-year lease with an unnamed hyperscaler, promising an additional five billion dollars in revenue. A testament, perhaps, to their persuasive powers, or merely a demonstration of the boundless optimism that pervades this industry. Their revenue, in the last quarter, hath increased by a staggering 250% year over year. A figure that would impress even the most hardened accountant.

However, let us not be blinded by these glittering numbers. A backlog of sixteen billion dollars is, admittedly, impressive. But it is largely dependent upon the patronage of but two customers. Should either of these giants falter, the consequences for Applied Digital could be dire. Furthermore, they are expending vast sums – some eight hundred million dollars in the last two quarters alone – to construct these “AI factories.” A prodigious investment, to be sure, but one fraught with risk.

Their revenue growth is undeniable, yet this company is not without its perils. And, at thirty-three times trailing sales, it is, shall we say, richly valued. A price that doth require a considerable leap of faith.

Reflections Upon the Future of Applied Digital

The demand for data centers will, undoubtedly, continue to rise. And Applied Digital, with its strategic location and ambitious plans, is well-positioned to benefit from this trend. Global spending on data centers is projected to reach four hundred and thirty billion dollars this year, and may surpass one trillion dollars by 2029. A veritable gold rush, if ever there was one.

I would not, however, recommend a large investment at this juncture. The company is, as yet, unprofitable, and its valuation is exceedingly high. Nevertheless, Applied Digital possesses the potential to be a high-growth company, capable of outperforming the market over the next five years. Whether or not it chooses to split its shares is, in the grand scheme of things, a matter of little consequence. The true measure of its worth will be found not in the price of its shares, but in the substance of its achievements.

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2026-01-15 23:53