1. HORIZON: 0 - 3 months (Short-Term)
2. FROM: 13 November 2025 | UNTIL: 13 February 2026
3. MANAGEMENT ASSESSMENT: 34.55% growth
4. RECOMMENDATION: BUY
5. PROJECTION BASED ON: R20 000
● Potential entry: Entry can be initiated once the share price closes above $27.50.
● Risk management: The stop-loss level is around $23.40, an area that represents a roughly 15% drop from the entry price.
● Profit target: The next key resistance is near $37, which aligns with a 34.55% move from current levels.
● Potentially massive, long-term revenue visibility
Applied Digital has secured a partnership with AI cloud provider CoreWeave (CRWV) for its Polaris Forge 1 campus. This agreement, which covers the full 400 megawatt capacity, is valued at $11 billion over 15 years, providing exceptional long-term revenue visibility and de-risking the company’s business model.
● Strategic change to high-growth AI infrastructure
The company has successfully shifted its focus from volatile cryptocurrency mining to designing and building AI-optimised data centres. This positions APLD directly in the path of growth, as hyperscalers are projected to invest over $350 billion in AI infrastructure in 2025 alone.
● Speed and execution advantage
APLD has a key competitive advantage in its ability to deliver critical data centre infrastructure rapidly. By shortening construction timelines from the typical 24 months down to just 12 - 14 months, the company has established itself as a trusted and essential partner for hyperscalers who have urgent and scalable computing needs.
The stock is currently experiencing a corrective pullback within a confirmed long-term uptrend. Several indicators suggest that this pullback may be nearing its end, presenting a potential buying opportunity.
● Long-term trend remains bullish
A critical indicator of long-term market sentiment is the 200-day simple moving average (SMA). The stock is trading well above its 200-day SMA, which is a strong bullish signal, indicating that the primary, long-term trend remains firmly in the control of the bulls.
● Key support confluence
The price has retraced to a significant support area around $27. It is simultaneously testing both its 50-day SMA and the lower trend line of a falling wedge pattern. A falling wedge is typically a bullish continuation pattern, and a successful test of its lower boundary often precedes a breakout to the upside.
● Potential for a momentum shift
The relative strength indicator (RSI) is currently below the 50 level and is heading towards oversold territory. This indicates that the recent downward momentum is getting exhausted. A reversal from these levels would suggest that upward momentum is imminent and buyers are likely to re-enter the market.
● High debt and financial risk
The company carries significant debt to fund construction, creating high interest costs and financial vulnerability.
● Extreme customer concentration
A vast majority of its revenue depends on a very small number of clients, making the loss of a single key partner a critical threat.
● Lack of profitability and high cash burn
The company is not yet profitable and is spending heavily on growth, creating negative cash flow that is unsustainable in the long term.
SOURCES
● Applied Digital Announces Expanded 15-Year, $11 Billion Contract with CoreWeave
● Big tech AI investment hits $300B surge in 2025
● Applied Digital Reports Fiscal Fourth Quarter and Full Year 2025 Results
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** This article was prepared by BROKSTOCK analyst Maboko Seabi
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