Despite some mid-week wobbles for stocks, especially in the growth sector, the market once again closed the week at new highs as the S&P 500 gained 1.9%, the Dow rallied 2.2% and the Nasdaq advanced by 2.3%.
The Stock – Applied Digital (APLD)
Applied Digital is one of a handful of new-age firms that are going by the HPC (high-performance computing) label—the firm actually has an interesting and odd history, but suffice it to say that it was formed in its current iteration a few years ago to focus on bitcoin mining, where it set up large data centers with lots of computing power to mine crypto assets, leading to up-and-down results as bitcoin came in and out of favor. However, with the insatiable need for computing power for AI, the firm has shifted gears into the HPC realm, which has the stock red hot and the numbers set to take off.
Essentially, Applied Digital provides all of the infrastructure (physical data centers with tons of GPUs, power, cooling, etc.) and leases them long-term to both established hyperscalers and some neocloud operators that use it for their various (usually AI) functions. (Applied’s facilities are in North Dakota, too, which the top brass thinks gives it an advantage, given the low-ish power costs there and ample supply.)
The company has a few irons in the fire—its Polaris Forge 1 campus just opened its first building today (100 megawatts worth of computing power), with two more buildings coming (one in the second half of 2026, one in the first half of 2027, 150 MW each); CoreWeave has leased all three buildings, with the contract for them worth an estimated $11 billion over 15 years!
Given the demand, Applied is also going ahead with a second campus, and it’s reportedly already inked deals with two hyperscalers worth about $5 billion over 15 years for its future construction. There could be more in the works, too, as it has a partnership with Macquarie, where that investment firm could provide capital to build another huge set of data centers. Revenues should start flowing now that the first building is open, with $550 million expected in 2026 and much more down the road.
Technical Analysis
For years APLD was a volatile, low-priced name that moved up and down usually based on bitcoin prices. But the move to HPC has changed the stock’s character, with the massive move up you can see in recent weeks and months. Of course, that makes this a high-risk proposition, so it’s not for the rent money. Stop – 24.5
The Covered Call Trade
Buy Applied Digital (APLD) Stock at 35, Sell to Open November 35 Strike Calls (exp. 11/21) for $4, or a Net Price of 31 or less
Static Return: $400 per covered call (12.9%)
Breakeven: 31
Covered Call Return (if assigned): $400 per covered call (12.9%)
Please note, the stock and options prices will be moving throughout the day, so these prices are simply an approximation of prices that you should be able to achieve.
However, the important component of this equation is that the stock price paid, minus the premium received via the call sale, equals the approximate Net Price, or 31 or less. (In this case 35 minus 4 = 31. Or another example is you could pay 34.50 for the stock and sell the call for 3.50, which also equals 31.)
For every 100 shares of stock you buy, you can sell 1 call. For every 200 shares of stock you buy, you can sell 2 calls. And so on …
Open Positions
| Stock Name and Symbol | Price Bought | Current Stock Price | Stop | Option - Price of Call Sold | Current Option Price |
| Century Aluminum (CENX) | 30.65 | 30 | 24 | November 31 -- $3 | $2 |
| Nextracker (NXT) | 85.8 | 99 | 70.5 | November 80 -- $10.80 | $19 |
| Celsius (CELH) | 64.35 | 62 | 54 | November 64 -- $5.45 | $4 |
The next Cabot Profit Booster issue will be published on November 4, 2025.
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