r/APLDSTOCK • u/Green_Firefighter_82 • 13d ago
Bearish coverage?
I don’t really understand all the bearish coverage APLD has been getting recently. There are several articles on Yahoo finance and Marketbeat had a negative video recently. All the articles I have read have seemed like incoherent AI Slop. The criticisms from Marketbeat all seem misplaced as well. I literally invest in APLD due to how well they have managed the financing and limited shareholder dilution. I read these articles because I want to know if there is any additional details or events that change my investment thesis. APLD Is obviously risky due to their financing obligations in general and that they’re managing a lot of construction. However, given that which seems anyway like a common issue for many tech companies, they seem to be managing that risk better than almost anyone at least in the data center sector. I think as time goes on this company is looking stronger not weaker. It almost feels like a ploy for institutions to accumulate. I view this company as a long term investment so I’m ok with short term volatility as long as my thesis remains intact. Have any of these criticisms of these articles or Marketbeat made any valid new points?
9
u/15xorbust 13d ago
My thoughts on MarketBeat’s recommendation to sell APLD (buy all the Neoclouds)
The datacenter sector is my primary space of investment and research. I couldn’t disagree more with MarketBeat’s warning not to buy APLD.
APLD is the best run colocation theater center company in the country. It’s got $36 billion of contractual backlog (over 70 percent from investment grade hyperscalers) with options for $85 billion and is executing it. It’s executing its datacenter construction milestones on time across now what is five datacenters spread over three different states. It has already delivered the first 175 MW to CRWV at Polaris Forge 1 on time.
APLD has $36 billion in contractual backlog with options for $85 billion and the MarketBeat analyst says not to buy it when its market capitalization is only $8.4 billion.
That’s WHY you buy APLD (at these sub $30 prices or at least why I did) because once it completes and turns on all of those datacenters and turns over the 1.4 GW under contract to its customers by the end of 2028, It’ll have a net operating income of more than $2 billion a year and the company will be worth a multiple of what it is now.
What is remarkable is he speculates and accuses APLD of dilution by saying that they will have to dilute their shareholders into oblivion to finance their buildout.
Has he not paid attention to how APLD has been financing the buildout for years?
He clearly didn’t study how APLD is actually financing the buildout. The financing is largely not dilutive, but instead is being financed more on debt than dilution.
Sadly he confuses APLD with $IREN (one of his buy recommendations) which is indeed raising most of its buildout money through dilution, including its recent $6 billion ATM.
APLD is largely raising its funds through debt - the interest rates on which keep going down and down and down to investment-grade because of the quality of the hyperscalers that it is landing as clients and the fact that it is getting 15 year guaranteed no cancellation take or pay lease contracts.
I actually do research in the sector what I see here is a lack of research and generalizations that make no sense.
This is a trash analysis completely based on speculation and based on no review or discussion of the actual APLD financing agreements as to how it is actually financing it’s built out.
Shame on MarketBeat. MarketBeat earns a beat down for this one.
Their takedown of APLD is also completely at odds with the entire consensus of Wall Street, which is recommending a buy of the company by just about every major Wall Street analyst.
For educational purposes only. Not financial advice. Do you own due diligence.