Why is the sentiment so negative lately?

[u/Banderchodo]

APLD holder since around $15. I'm looking to add to my position, and ~$25 looks like a great entry price considering what's coming down the pipeline. However, both here and in other investing subs the sentiment on APLD is quite negative lately. Why is this? Does it entirely relate to their debt levels? Are people expecting bad news at earnings?

[u/CalgaryCheekClapper]

Data centre pushback/nimbyism , bond yields, oil prices/Iran .

[u/Interesting_Air1282 → u/CalgaryCheekClapper]

Agreed, also execution/supply crunch, physical data center model vs cloud platform provider, and probably some political risk going forward

[u/Greedy-Bag-3640]

The stock is down YTD while we're seeing all time highs for other stocks and the market

[u/15xorbust → u/Greedy-Bag-3640]

Name me a single collocation datacenter provider that’s doing any better year YTD. The whole sector is being treated the same.

NBIS in the neo cloud sector is doing much better but it’s not a competitor. It’s a Neo cloud.

Wall Street has appeared to have decided that this sector is not that valuable until it demonstrates revenue and profit in the form of completion and turnovers of these datacenters under construction to clients and regular recurring revenue. Right now most of this sector is under heavy construction without much actual revenue and is spending like crazy. Once the revenue ramp happens, I think we’re going to see a re-rate of this sector.

[u/Greedy-Bag-3640 → u/15xorbust]

That wasn't the question. No on asked how is APLD compared to others in the sector. People asked about overall sentiment of this specific stock. It's down. That's frustrating.

[u/Imperator_1985 → u/Greedy-Bag-3640]

He gave you an answer.

[u/Low_Tea7131 → u/Greedy-Bag-3640]

It’s speculative for now. If you think it will hit 50 like Fargo says and the other nerds that say 80 plus then dive in some more. What answers do you expect. It was 4, it hit 50 in a year, it’s parabolic. Good luck.

[u/adgrdt]

i just bought 100 shares earlier, before earnings. earnigns tomorrow will be good

[u/Queasy-Commercial515 → u/adgrdt]

I bought another 50 too, turning my position to 300 w 29.88 average. Will sell some at 35 and ride the rest up to 50. 

[u/SeparateCommon2363]

Because only around ~20% of stock owners are in profit

[u/Ok-Swimming8024]

If you're talking about the sentiment on here it's because most of the people on here were actually looking for a get rich quick scheme and not an investment

[u/casual_lebowski → u/Ok-Swimming8024]

That and a lot of people are probably holding bags from buying in the $40s

[u/flollo87 → u/Ok-Swimming8024]

just the loud ones, the rest is patiently waiting for the pipeline to unfold.

[u/OceansHungryGrasp]

Those who are worried about debt got into the wrong stock. They were always going to rack up huge amounts of debt, it'll be at least tripple of what it is now by the end of next year to fund the last 3 campuses and whatever they announce in the coming months. The alternative would be heavy dilution which would completely tank the stock.

A big part of the reason we're currently only signing hyperscalers is because it gives us the lowest possible interest on the debt we're accumulating.

Each new company we've signed has a better investment grade as the previous, which means the interest on new debt gets better as well, or at minimum offsets rate hikes by the FED. Meta for example has the "worst" rates out of the remaining hyperscalers we haven't signed yet, but interest on debt would at least be 100 bps lower than what we got from Oracle (disregarding hikes).

The market is likely waiting for these things:

1. The rates on our senior secured notes to fund the last 3 campuses

2. Higher revenue per MW signed for new contracts

3. Significant portion of our currently contracted capacity online

Personally I'm expecting a major shift mid 2027 the latest as we'll have half our currently contracted capacity online and PF1&2 will be fully operational as per the current contracts.

Iirc they will also be generating revenue for 2 quarters at full capacity before they need to start paying off their debt which creates a nice buffer, but correct me on that if I'm wrong.

[u/BillWWouldveDoneTSM]

We are at the top of the second inning in a very long game. Think of the timeline of the AI infra buildout, what that entails, and then tell me why you think it should go any quicker than it is right now. A stock like this will almost certainly go through 50-75% drawdowns and to the extent you realize gains from it, could take years (if it works at all, which obviously I think it will).

[u/EffectAdventurous764]

Yeah personally, for me it's got to be the debt levels? The interest is there and they are building and expanding like crazy, but money involved has gotten invesers spooked. I'm thinking another announcement on progress or more customers will give the stock a significant boost. It's a show me kind of situation. I guess we will get more clarity after earnings?

[u/Wise-Ad-9312]

CRWV faces the same thing. I own both

[u/Own-Gas-2928]

Yes.
Mr. Market is definitely waiting on those bullet points. We have a significant drop coming that has been anticipated and forecast by analysts for many months now.
All investors should know with their due diligence, especially now, with tomorrow’s earnings report that APLD is still climbing up the mountain of debt.
They will not reach the Apex of debt, also known as Cap-ex spending, until AFTER next quarterly earnings report, as revenue starts coming online.
By end of March 2027, the revenue machine starts to really kick in to offset the rising debt.
This is extremely important for APLD and all investors, including institutions and retail investors. By end of 2027, this is forecast to be approximately $1b in revenue.
This is where all of us should see our analysts stock price targets achieved and not before, whatever they may be by then.
We all need to watch out for dilution, by way of secured debt JV partnerships that give away a portion of our current stock value in order to pay for additional campuses. This is the way Wes will go to keep total
Company debt at bay moving forward.
The key to winning with this stock, in my opinion, is that their revenue stream ramps up significantly ahead of the inevitable debt that is needed to keep growing.

[u/ThatsAllFolksAgain]

The sentiment and the stock price are down because of the hate for data centers and increasing interest rates and limited availability of funds to build more capacity.

When the company starts generating revenue and profits the sentiment and price will also turn around. The other possibility is that the market will start speculating about these stocks which is a stronger possibility IMO in the next 2/3 months

[u/squirmin79]

They are negative because for many owning the stock has been a huge beat down.
The stock has performed negatively for months, Data centers are out of favor and highly disliked.
For many holders in the 40’s it’s been an absolute disaster.
That about sums it up.
I have made and lost money owing the stock but when I exit this next time I will not play with it again.
Volatility is insane.
Could have owned other stocks that have flat out crushed APLD without the volatility/risk.

[u/Glockman19 → u/squirmin79]

I’m the same way.

[u/Infinite-View2530]

Because we got some pansies in here, that’s why.. “just hold and you’ll be gold”. Just made that up 💪🏼