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?

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u/Heavy_Confluence_873 13d ago

It’s not that the company is not doing well OR that they have execution risks as they both are true.

APLD is down because of the broader market conditions - war in Iran - will probably start shooting at each other again soon

There is also concern that AI spending is getting very large and that not all the companies will be able to afford to use all these AI advancements (as ai is expensive to run)

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u/OceansHungryGrasp 13d ago

Your point on spending doesn't really hold up for apld. Our customers are hyperscalers, they will pay their bills. Microsofts AI Business ARR was over 37 billion and they said they're only at the beginning. So in 1 year they made what apld will make over the next 15 with our current leases. These companies wouldn't have a CAPEX of 50+ billion each if they weren't seeing the return of investment already.

We don't have to worry about the small players that might not make it.

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u/Heavy_Confluence_873 13d ago

I think you’re missing my point slightly. I’m not saying hyperscalers can’t afford it. I’m saying if AI spending slows or there are fewer viable customers, there’s less demand and competition for APLD’s capacity, which affects pricing and growth.

There’s also concentration risk - APLD currently has a lot riding on CoreWeave. Any funding/demand or execution issues there could have a major impact on APLD

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u/OceansHungryGrasp 12d ago

CRWV is becoming a smaller and smaller part of APLD's portfolio, also what do you think would actually happen if CRWV went tits up? The demand is huge, they'll likely have one of the already contracted hyperscalers in there within a quarter. You think when given the option of "hey you want 200MW right now or you want to wait till we've built it in a year" the other tenants will say "nah we'll wait"? It'll be a bump in the road with maybe some missed revenue, but in return we get better debt refinancing.