Two Stocks Analysts Flag for a Potential $1,000 Allocation as Year-End Approaches

With only a few weeks left on the 2025 calendar, some investors are looking for tactical adjustments to their portfolios. Recent trading data and corporate developments have placed Applied Digital and Netflix in the spotlight as possible destinations for a modest, higher-risk investment of about $1,000. Although the companies operate in very different markets, both have experienced sharp price swings that proponents view as entry points.

Applied Digital: Accelerating Revenue and Long-Term Contracts

Applied Digital (NASDAQ: APLD) has emerged as a notable provider of artificial-intelligence infrastructure. The stock has more than tripled in 2025 and has risen nearly sixfold over the past five years. Despite that multi-year rally, shares remain volatile; the price fell 9 percent last Friday and now sits 31 percent below the record high reached two months ago. The company’s market capitalization is just under $8 billion.

Growth metrics have shifted markedly over the past fiscal year. Applied Digital’s fiscal 2025, which closed at the end of May, delivered a 6 percent rise in total revenue. Momentum picked up in subsequent quarters: management reported top-line increases of 22 percent in the fiscal third quarter, 41 percent in the following quarter, and 84 percent in the most recent period. Executives attribute the acceleration primarily to demand for AI-focused data-center capacity.

A central pillar of that demand is the company’s agreement with CoreWeave (NASDAQ: CRWV), an AI hyperscaler expanding its computing footprint. The two parties signed a 15-year lease during fiscal 2025 with an initial contract value of $7 billion. CoreWeave has since extended the commitment to $11 billion, providing Applied Digital with clearer visibility into future cash flows. Management estimates that the arrangement could eventually produce nearly $500 million in annual net operating income.

Supporters of the stock point to the lease as evidence of durable, recurring revenue. They also note the pace at which CoreWeave and other hyperscalers are seeking additional capacity for AI training and inference workloads. Critics counter that rapid expansion in the sector could invite new competition or pressure profit margins if hardware costs rise. For now, Applied Digital’s capital-intensive model and long-term contracts form the basis of many bullish arguments.

Netflix: Post-Acquisition Pullback Fuels Debate

Netflix (NASDAQ: NFLX) has spent 2025 pursuing strategic scale in the streaming landscape. The company’s acquisition of Warner Bros. Discovery was completed earlier this year and is viewed by some analysts as a move to consolidate content libraries and bolster negotiating power with advertisers. Market response, however, has been mixed. Since peaking in October, Netflix shares have retreated, leaving the stock well below recent highs.

Supporters contend that the sell-off reflects uncertainty rather than fundamentals. They argue that Warner Bros. Discovery’s film and television catalog could reinforce Netflix’s position in scripted programming and reduce content churn among subscribers. Skeptics highlight integration risks, potential regulatory scrutiny, and the cost of servicing debt incurred to finance the deal. Until more financial data are available, investors remain divided on whether the acquisition will translate into earnings growth.

Advocates of a $1,000 position emphasize Netflix’s ability to convert large subscriber bases into recurring revenue. They also point to management’s track record of international expansion and the platform’s global brand recognition. Furthermore, the combined entity holds a broad portfolio of intellectual property, ranging from premium cable series to major theatrical releases. How quickly those assets can be monetized under the Netflix distribution model is likely to influence sentiment in 2026.

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Risk Profile and Timing Considerations

Both companies carry above-average risk, though for different reasons. Applied Digital operates in a capital-intensive industry closely tied to demand for AI processing power. Delays in data-center construction, shifting technology standards, or a slowdown in AI investment could affect revenue projections. Netflix faces the complexities of integrating a large media library, managing production costs, and navigating an evolving competitive landscape in streaming video.

Still, proponents see the current share-price weakness in both stocks as an opportunity to establish or expand positions without deploying large sums of capital. A $1,000 tranche allows investors to participate in potential upside while capping absolute dollar exposure.

As always, timing and risk tolerance remain individual decisions. Those considering Applied Digital are effectively wagering on continued demand for AI-related infrastructure and the successful execution of multi-billion-dollar leases such as the CoreWeave agreement. Investors eyeing Netflix are betting that content consolidation will yield subscriber growth, revenue synergies, and a rebound in market sentiment once the integration of Warner Bros. Discovery advances.

Whether either scenario materializes will depend on broader economic conditions, competitive actions, and the management teams’ ability to deliver on stated objectives. In the meantime, the recent pullbacks provide a focal point for investors prepared to accept volatility in pursuit of long-term gains.

Crédito da imagem: Getty Images