Applied Digital (APLD) Capitalizes on AI Data Center Boom with Explosive Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 21 2026
0mins
Should l Buy APLD?
Source: NASDAQ.COM
- Significant Revenue Growth: Applied Digital is experiencing explosive revenue growth driven by the AI data center boom, indicating strong market demand and potential for long-term profitability.
- Contract Value Breakthrough: The company has secured billion-dollar contracts, which not only strengthens its market position but also lays a solid financial foundation for future expansion.
- Execution Risks Present: While the company faces execution risks, the upside could be enormous if demand remains strong, potentially leading to significant shareholder value enhancement.
- Cautious Investment Advice: Despite the optimistic market outlook, the Motley Fool analyst team did not include Applied Digital in their top ten stock recommendations, advising investors to carefully assess investment risks.
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Analyst Views on APLD
Wall Street analysts forecast APLD stock price to rise
10 Analyst Rating
10 Buy
0 Hold
0 Sell
Strong Buy
Current: 31.530
Low
36.00
Averages
52.22
High
99.00
Current: 31.530
Low
36.00
Averages
52.22
High
99.00
About APLD
Applied Digital Corporation is a designer, builder, and operator of sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking, and blockchain workloads. The Company’s segments include data center hosting (Data Center Hosting Business) and high-performance compute hosting (HPC Hosting Business). The Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. Customer-owned hardware is installed in its facilities, and the Company provides operational and maintenance services for a fixed fee. Its facilities include a 106 megawatt (MW) facility in Jamestown and a 180 MW facility in Ellendale, North Dakota. The HPC Hosting Business designs, builds, and operates data centers which are designed to support high-compute applications using advanced technologies and infrastructures to provide services to customers. Its HPC data center is located at its Polaris Forge 1 campus with 100 MW capacity.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Opportunities in Data Centers and Digital Advertising
- Applied Digital Growth Potential: Applied Digital signed an $11 billion contract with CoreWeave and a $5 billion deal with another unnamed hyperscaler, projecting over $16 billion in lease revenue from data centers over the next 15 years, highlighting its strong market position amid rising AI demand.
- Significant Revenue Surge: The company reported a 250% year-over-year revenue increase to $126 million last quarter, partly due to the CoreWeave lease initiation, with management targeting $1 billion in annual operating profit over the next five years, which could substantially enhance its market cap.
- Reddit User Growth: Reddit's daily active users rose 19% year-over-year to 121 million, and despite a 54% drop from recent highs, its robust user base and advertising revenue growth present an attractive investment opportunity.
- Advertising Revenue Boost: Reddit's revenue surged 70% year-over-year in Q4 2025, driven by increased ad impressions and higher ad pricing, indicating a high return on investment for advertisers, with analysts projecting a 37% annualized earnings-per-share growth in the coming years.
See More
Two Growth Stocks to Invest in Over the Next Five Years
- Applied Digital Contracts: Applied Digital signed an $11 billion contract with CoreWeave and a $5 billion deal with another unnamed hyperscaler, which together could generate over $16 billion in lease revenue over the next 15 years, significantly boosting market confidence in the company.
- Data Center Construction Advantage: The company's data centers in North Dakota leverage the region's low-cost, abundant energy and natural cooling, which are expected to reduce energy costs and improve operational efficiency, thereby enhancing long-term profitability.
- Reddit User Growth: Reddit's daily active users increased by 19% year-over-year to 121 million, and despite the stock trading 54% below recent highs, this presents a strong buying opportunity, showcasing the platform's vibrancy and advertising potential.
- Surge in Advertising Revenue: Reddit's revenue surged 70% year-over-year in Q4 2025, driven by increased ad impressions and higher ad pricing, indicating high returns on investment for advertisers, with analysts projecting 37% annualized earnings-per-share growth in the coming years.
See More
Investment Opportunities in Applied Digital and Reddit
- Data Center Opportunity: Applied Digital signed an $11 billion contract with CoreWeave and a $5 billion deal with another unnamed hyperscaler, projecting over $16 billion in lease revenue over the next 15 years, significantly enhancing the company's market position and investor confidence.
- Significant Revenue Growth: Applied Digital's revenue surged 250% year-over-year to $126 million last quarter, partly due to the start of the CoreWeave lease, with management targeting $1 billion in annual operating profit over the next five years, which could substantially increase its market cap.
- Reddit User Growth: Reddit's daily active users increased by 19% year-over-year to 121 million, and despite the stock trading 54% below recent highs, analysts project a 37% annualized earnings-per-share growth over the next several years, indicating the stock's attractiveness at current prices.
- Advertising Revenue Boost: Reddit's advertising revenue surged 70% year-over-year in Q4 2025, driven by increased ad impressions and higher ad pricing, demonstrating that its platform offers high returns on investment for advertisers, further solidifying its competitive edge.
See More
Data Center Developers Shift Focus to AI Market
- Applied Digital's Meteoric Growth: Applied Digital's stock has surged approximately 260% over the past year, with a recent quarterly revenue increase of 250% year-over-year and a 76% reduction in net loss, indicating strong growth potential in the AI data center sector.
- Long-Term Contracts Secure Revenue: The company has signed long-term contracts with two hyperscalers, including CoreWeave, ensuring revenue stability and securing $16 billion in long-term lease agreements, targeting $1 billion in net operating income within five years.
- Riot Platforms' Transition Strategy: Riot Platforms reported $180 million in revenue and $104 million in net income in its latest quarter, and while Bitcoin price volatility affects earnings, it is accelerating its pivot to AI data centers to diversify revenue streams.
- New Facility Construction and Expected Earnings: Riot is building a new data center in Rockdale, Texas, expected to generate up to $1 billion in revenue over ten years, with projections of $1 billion in revenue and $125 million in net income by 2028, reflecting confidence in long-term growth.
See More
Surge in Demand for AI Data Centers
- Applied Digital's Meteoric Growth: Applied Digital's stock has surged approximately 260% over the past year, with a recent quarterly revenue growth of 250% year-over-year and a 76% reduction in net loss, indicating strong performance in its pivot to AI data centers and targeting $1 billion in net operating income over the next five years.
- Riot Platforms' Profitability Improvement: Riot Platforms generated $180 million in revenue and achieved $104 million in net income in its latest quarter, a significant turnaround from a $154 million net loss a year ago, showcasing its potential for revenue diversification beyond Bitcoin mining.
- Accelerated Data Center Construction: Applied Digital is constructing multiple data centers, including the Polaris 3 and Delta Forge 1, both set to open in 2027, and has secured $16 billion in long-term lease agreements with CoreWeave, further solidifying its market position.
- Riot's Partnership with AMD: Riot Platforms has signed a 10-year lease agreement with AMD for a new data center, expected to generate up to $1 billion in revenue, and anticipates revenue growth in fiscal 2026, highlighting its strategic pivot towards AI data centers.
See More
CoreWeave's Financing Woes Trigger Market Sell-Off
- Financing Challenges: CoreWeave faces significant financing friction for its ambitious infrastructure expansion, leading to a stock sell-off that undermines investor confidence in its flagship GPU-as-a-service model, highlighting concerns over liquidity in the AI infrastructure sector.
- Market Contagion: Blue Owl's decision to halt quarterly redemptions for its retail fund is interpreted as a warning signal for liquidity issues, causing stock declines in Nebius and Applied Digital, both of which operate in the same capital-intensive ecosystem.
- Shifting Investor Sentiment: Despite assurances from CoreWeave and Blue Owl regarding a $500 million bridge loan and intact project timelines, market reactions indicate that investors are increasingly focused on the solidity of data center financing rather than just growth metrics and GPU counts.
- Uncertain Industry Outlook: The stock declines of CoreWeave, Nebius, and Applied Digital reflect a growing uncertainty about the future of AI infrastructure, with investors urgently seeking stronger financing assurances to restore confidence in this capital-intensive industry.
See More
Investment Opportunities in Data Centers and Digital Advertising
- Applied Digital Growth Potential: Applied Digital signed an $11 billion contract with CoreWeave and a $5 billion deal with another unnamed hyperscaler, projecting over $16 billion in lease revenue from data centers over the next 15 years, highlighting its strong market position amid rising AI demand.
- Significant Revenue Surge: The company reported a 250% year-over-year revenue increase to $126 million last quarter, partly due to the CoreWeave lease initiation, with management targeting $1 billion in annual operating profit over the next five years, which could substantially enhance its market cap.
- Reddit User Growth: Reddit's daily active users rose 19% year-over-year to 121 million, and despite a 54% drop from recent highs, its robust user base and advertising revenue growth present an attractive investment opportunity.
- Advertising Revenue Boost: Reddit's revenue surged 70% year-over-year in Q4 2025, driven by increased ad impressions and higher ad pricing, indicating a high return on investment for advertisers, with analysts projecting a 37% annualized earnings-per-share growth in the coming years.
See More
Two Growth Stocks to Invest in Over the Next Five Years
- Applied Digital Contracts: Applied Digital signed an $11 billion contract with CoreWeave and a $5 billion deal with another unnamed hyperscaler, which together could generate over $16 billion in lease revenue over the next 15 years, significantly boosting market confidence in the company.
- Data Center Construction Advantage: The company's data centers in North Dakota leverage the region's low-cost, abundant energy and natural cooling, which are expected to reduce energy costs and improve operational efficiency, thereby enhancing long-term profitability.
- Reddit User Growth: Reddit's daily active users increased by 19% year-over-year to 121 million, and despite the stock trading 54% below recent highs, this presents a strong buying opportunity, showcasing the platform's vibrancy and advertising potential.
- Surge in Advertising Revenue: Reddit's revenue surged 70% year-over-year in Q4 2025, driven by increased ad impressions and higher ad pricing, indicating high returns on investment for advertisers, with analysts projecting 37% annualized earnings-per-share growth in the coming years.
See More
Investment Opportunities in Applied Digital and Reddit
- Data Center Opportunity: Applied Digital signed an $11 billion contract with CoreWeave and a $5 billion deal with another unnamed hyperscaler, projecting over $16 billion in lease revenue over the next 15 years, significantly enhancing the company's market position and investor confidence.
- Significant Revenue Growth: Applied Digital's revenue surged 250% year-over-year to $126 million last quarter, partly due to the start of the CoreWeave lease, with management targeting $1 billion in annual operating profit over the next five years, which could substantially increase its market cap.
- Reddit User Growth: Reddit's daily active users increased by 19% year-over-year to 121 million, and despite the stock trading 54% below recent highs, analysts project a 37% annualized earnings-per-share growth over the next several years, indicating the stock's attractiveness at current prices.
- Advertising Revenue Boost: Reddit's advertising revenue surged 70% year-over-year in Q4 2025, driven by increased ad impressions and higher ad pricing, demonstrating that its platform offers high returns on investment for advertisers, further solidifying its competitive edge.
See More
Data Center Developers Shift Focus to AI Market
- Applied Digital's Meteoric Growth: Applied Digital's stock has surged approximately 260% over the past year, with a recent quarterly revenue increase of 250% year-over-year and a 76% reduction in net loss, indicating strong growth potential in the AI data center sector.
- Long-Term Contracts Secure Revenue: The company has signed long-term contracts with two hyperscalers, including CoreWeave, ensuring revenue stability and securing $16 billion in long-term lease agreements, targeting $1 billion in net operating income within five years.
- Riot Platforms' Transition Strategy: Riot Platforms reported $180 million in revenue and $104 million in net income in its latest quarter, and while Bitcoin price volatility affects earnings, it is accelerating its pivot to AI data centers to diversify revenue streams.
- New Facility Construction and Expected Earnings: Riot is building a new data center in Rockdale, Texas, expected to generate up to $1 billion in revenue over ten years, with projections of $1 billion in revenue and $125 million in net income by 2028, reflecting confidence in long-term growth.
See More
Surge in Demand for AI Data Centers
- Applied Digital's Meteoric Growth: Applied Digital's stock has surged approximately 260% over the past year, with a recent quarterly revenue growth of 250% year-over-year and a 76% reduction in net loss, indicating strong performance in its pivot to AI data centers and targeting $1 billion in net operating income over the next five years.
- Riot Platforms' Profitability Improvement: Riot Platforms generated $180 million in revenue and achieved $104 million in net income in its latest quarter, a significant turnaround from a $154 million net loss a year ago, showcasing its potential for revenue diversification beyond Bitcoin mining.
- Accelerated Data Center Construction: Applied Digital is constructing multiple data centers, including the Polaris 3 and Delta Forge 1, both set to open in 2027, and has secured $16 billion in long-term lease agreements with CoreWeave, further solidifying its market position.
- Riot's Partnership with AMD: Riot Platforms has signed a 10-year lease agreement with AMD for a new data center, expected to generate up to $1 billion in revenue, and anticipates revenue growth in fiscal 2026, highlighting its strategic pivot towards AI data centers.
See More
CoreWeave's Financing Woes Trigger Market Sell-Off
- Financing Challenges: CoreWeave faces significant financing friction for its ambitious infrastructure expansion, leading to a stock sell-off that undermines investor confidence in its flagship GPU-as-a-service model, highlighting concerns over liquidity in the AI infrastructure sector.
- Market Contagion: Blue Owl's decision to halt quarterly redemptions for its retail fund is interpreted as a warning signal for liquidity issues, causing stock declines in Nebius and Applied Digital, both of which operate in the same capital-intensive ecosystem.
- Shifting Investor Sentiment: Despite assurances from CoreWeave and Blue Owl regarding a $500 million bridge loan and intact project timelines, market reactions indicate that investors are increasingly focused on the solidity of data center financing rather than just growth metrics and GPU counts.
- Uncertain Industry Outlook: The stock declines of CoreWeave, Nebius, and Applied Digital reflect a growing uncertainty about the future of AI infrastructure, with investors urgently seeking stronger financing assurances to restore confidence in this capital-intensive industry.
See More
