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Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
Applied DigitalAPLD +7.90%38 WACC % is 31.27% as of Jul. 22, 2026, which is 120% above its 10-year median of 14.23. GuruFocus rates APLD with a GF Score™ of 38/100 and a GF Value™ of $14.40 (Significantly Overvalued). The stock has 7 warning signs investors should review. Among 2,925 Software companies, Applied Digital ranks worse than 98.74% on this metric.
As of today (2026-07-22), Applied Digital's weighted average cost of capital is 31.27%%. Applied Digital's ROIC % is -2.57% (calculated using TTM income statement data).
Applied Digital earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
Applied Digital (NAS:APLD) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Applied Digital's weighted average cost of capital is 31.27%%. Applied Digital's ROIC % is -2.57% (calculated using TTM income statement data).
Applied Digital earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Applied Digital WACC % Historical Data
* Premium members only.
The historical data trend for Applied Digital's WACC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Information Technology Services subindustry, Applied Digital's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Applied Digital WACC % vs Software Industry
For the Software industry and Technology sector, Applied Digital's WACC % distribution charts can be found below:
* The bar in red indicates where Applied Digital's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Applied Digital's market capitalization (E) is $8587.375 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Feb. 2026, Applied Digital's latest one-year quarterly average Book Value of Debt (D) is $1566.5822 Mil.
a) weight of equity = E / (E + D) = 8587.375 / (8587.375 + 1566.5822) = 0.8457
b) weight of debt = D / (E + D) = 1566.5822 / (8587.375 + 1566.5822) = 0.1543
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.638%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Applied Digital's beta is 5.3712.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.638% + 5.3712 * 6% = 36.8652%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Feb. 2026, Applied Digital's interest expense (positive number) was $9.934 Mil. Its total Book Value of Debt (D) is $1566.5822 Mil.
Cost of Debt = 9.934 / 1566.5822 = 0.6341%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 0.005 / -103.168 = -0%.
Applied Digital's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.8457
*
36.8652%
+
0.1543
*
0.6341%
*
(1 - -0%)
=
31.27%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Applied Digital (APLD) has a WACC % of 31.27% as of Jul. 22, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Applied Digital and its competitors. This is 120% above median its historical median of 14.23. According to the industry distribution chart, Applied Digital ranks #2888 out of 2925 companies in the Software industry, placing it in the top 98.7%.
Is Applied Digital's WACC % too high?
Applied Digital's current WACC % of 31.27% is 120% above median its 10-year median of 14.23. The Software industry median WACC % is 8.97. Applied Digital's value of 31.27% is 248.6% above this industry median. Based on the distribution chart, Applied Digital ranks #2888 out of 2925 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, Applied Digital has a GF Score™ of 38/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Applied Digital's WACC % compare to CIFR and WSE?
According to the Software industry distribution chart, Applied Digital ranks #2888 out of 2925 companies for WACC %. This places Applied Digital in the lower half of its industry. The industry median WACC % is 8.97. Applied Digital's value of 31.27% is 248.6% above this benchmark. While the company's 10-year median is 14.23 vs. the industry median of 8.97, Applied Digital has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Software company?
The median WACC % among Software companies is 8.97, based on 2,925 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Applied Digital's current WACC % of 31.27% is 248.6% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Applied Digital and its competitors. For the Software industry, the median WACC % is 8.97 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Applied Digital's current WACC % is 31.27%, which is 120% above median its own 10-year median of 14.23. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Applied Digital stock overvalued right now?
Based on GuruFocus' analysis, Applied Digital (APLD) is currently considered Significantly Overvalued. The stock's GF Value™ is $14.40, compared to a current price of $30.05 — trading 108.7% above its estimated fair value. The current WACC % is 31.27%, which is 120% above median its 10-year median of 14.23 and 248.6% above the Software industry median of 8.97. Applied Digital's overall GF Score™ is 38/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Applied Digital (APLD), the current WACC % is 31.27% as of Jul. 22, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Applied Digital (APLD) Overvalued in 2026?
Based on GuruFocus' analysis, Applied Digital stock appears to be overvalued.
The current stock price of $30.05 is trading 108.7% above its estimated GF Value™ of $14.40.
GuruFocus considers Applied Digital to be Significantly Overvalued.
Key valuation signals for APLD:
WACC %: 31.27% (120% above median its 10-year median of 14.23)
GF Value™: $14.40 vs. price of $30.05 (108.7% above fair value)
Industry Position: 248.6% above the Software median (#2888 of 2925)
No single metric tells the full story. See the APLD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Applied Digital Corp is a designer, developer, and operator of next-generation digital infrastructure across North America. It provides digital infrastructure solutions and cloud services to industries like High-Performance Computing (HPC) and Artificial Intelligence (AI). The company operates in the following business segments: Data Center Hosting Business and HPC Hosting Business. The majority of its revenue is generated from the Data Center Hosting Business, which operates data centers to provide energized space to crypto mining customers.
38GF Score
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