In a historic run that has stunned Wall Street and Main Street alike, Applied Digital Corporation (APLD) has emerged as the top-performing stock of the past five years, skyrocketing from mere pennies to over $12.48 per share in today's price. What makes this even more astonishing is that, in the past 3 years, the stock is actually down a bit. 

On June 10, 2020, Applied Digital was trading at just $0.05 per share. By October 2021, it reached a high of $28.14 — a 56,180% return. While the stock has pulled back to only $12.48, it’s still up 26,690% from its five-year lows, making it the best-performing name among small and mid-cap stocks. 

From Obscurity to Market Sensation

Five years ago, few outside the digital infrastructure and blockchain communities had heard of Applied Digital. The Dallas-based company, formerly known as Applied Blockchain Inc., was trading at true penny stock territory, at just around a nickel per share back in 2020. Today, its shares change hands above $12, and its market capitalization has ballooned to almost $3 billion. In 2022, Applied Digital only had $8 million in revenue. Now, they’ve cleared $221 million over the past 12 months. 

The primary driver behind APLD’s meteoric rise has been the global explosion in demand for artificial intelligence (AI) and high-performance computing (HPC) infrastructure. As AI models have grown exponentially in size and complexity, so too has the need for specialized data centers capable of delivering the massive power and cooling required for next-generation workloads.

Applied Digital positioned itself at the heart of this revolution by designing, building, and operating state-of-the-art data centers optimized for both blockchain and AI applications. The company’s early focus on providing scalable, energy-efficient infrastructure for crypto mining gave it a technological and operational edge that proved invaluable as the AI wave hit full force.

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Despite this performance, some analysts think APLD stock still has more room to run. The mean price target for Applied Digital among Wall Street analysts is $13.55, with a high target of $18. With the demand for AI services continuing to grow, however, these numbers are likely to keep rising rapidly.

Strategic Shifts and Partnerships

APLD’s management recently made a series of bold strategic moves, reinvesting early crypto-driven profits into expanding its data center footprint and diversifying into AI and enterprise HPC hosting. Key partnerships with leading AI developers and cloud service providers further cemented its reputation as a go-to provider for high-density, high-power digital workloads.

As generative AI and machine learning became the defining technologies of the decade, demand for Applied Digital’s services soared. The company’s ability to rapidly scale operations and secure long-term contracts with major tech firms drove revenue growth and investor enthusiasm.

Volatility and Speculation

Despite its extraordinary performance, Applied Digital’s journey has not been without volatility. The stock experienced sharp swings, particularly during periods of crypto market turbulence and as speculative fervor gripped AI-adjacent equities. Some analysts have cautioned that the company’s fundamentals remain speculative, with rapid growth outpacing traditional valuation metrics.

Applied Digital’s ascent encapsulates the transformative impact of AI and digital infrastructure on the modern economy. Its story mirrors the broader market shift, as investors increasingly seek exposure to the backbone technologies powering AI, blockchain, and next-generation computing.

With AI adoption still in its early stages and demand for high-performance data centers showing no signs of slowing, Applied Digital’s future remains closely tied to the trajectory of the digital economy. While risks remain, its five-year run stands as a testament to the seismic shifts underway in technology and infrastructure — and to the outsized rewards that can accrue to those who bet early and boldly on the future.

And that’s how a once-dying penny stock down over 99.93% from its all-time highs is quickly becoming a market leader in one of the most disruptive industries in the history of the world.