Applied Digital Reports $126.6M Q2 Revenue, Beats Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 08 2026
0mins
Should l Buy APLD?
Source: Benzinga
- Revenue Beat: Applied Digital reported Q2 revenue of $126.6 million, a 249% increase from $36.2 million a year ago, not only surpassing expectations of a 10-cent loss but also highlighting strong demand in HPC and data center hosting sectors.
- HPC Revenue Surge: The company generated $85 million in HPC hosting revenue, indicating rising demand particularly from hyperscalers in the Dakotas, which further solidifies its market position in high-performance computing.
- Innovative Eyewear Sales Growth: Innovative Eyewear's preliminary Q4 sales reached approximately $1 million, a 45% year-over-year increase, with full-year 2025 revenue projected at $2.7 million, a 65% rise, showcasing its strong competitive edge in the Amazon smart safety glasses market.
- Defense Contract Approval: RTX Corporation secured a substantial $438 million contract from the FAA for next-generation air traffic radars, expected to enhance the safety and efficiency of the U.S. National Airspace System, thereby driving further growth in the defense sector.
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Analyst Views on APLD
Wall Street analysts forecast APLD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for APLD is 49.18 USD with a low forecast of 36.00 USD and a high forecast of 99.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
11 Buy
0 Hold
0 Sell
Strong Buy
Current: 31.540
Low
36.00
Averages
49.18
High
99.00
Current: 31.540
Low
36.00
Averages
49.18
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.
Applied Digital's Stock Soars Amid AI Demand but Faces Significant Risks
- Significant Sales Growth: In its fiscal Q2 2026, Applied Digital reported a 250% surge in sales to nearly $127 million, highlighting its strong performance amid soaring demand for AI infrastructure; however, the rapid sales growth has not translated into profitability, as the company faces high expenditure pressures.
- Leasing Agreement Potential: The multi-year leasing agreements with CoreWeave are projected to generate up to $16 billion in revenue over 15 years, providing a stable cash flow source for the company, but this also hinges on the continued growth of the AI market.
- Expenditure and Loss Issues: Despite the significant sales increase, Applied Digital's total expenses rose by 230% in the same quarter to nearly $158 million, resulting in a non-GAAP diluted loss of $0.07 per share, reflecting severe challenges in achieving profitability.
- Overvaluation Concerns: With a price-to-sales ratio of about 31, significantly higher than the tech sector average of 9, it indicates that investors are overpaying for an AI company that has yet to achieve profitability, suggesting potential downward pressure on the stock price and caution for investors considering holding the stock.
See More
AI Drives Explosive Growth in Data Center Sector
- Surging Market Demand: The rise of AI technology has led to an explosive demand for data centers, with Applied Digital's stock soaring nearly 500% over the past 12 months to a 52-week high of $42.27, indicating strong market demand for its services.
- Expanding Customer Base: In its fiscal second quarter, Applied Digital reported sales of $126.6 million, a remarkable 250% increase year-over-year, with major client CoreWeave signing long-term leases worth approximately $11 billion, showcasing the company's robust growth potential in the AI infrastructure market.
- Increasing Financial Challenges: Despite significant sales growth, Applied Digital's cost of revenue reached $100.6 million in Q2, a staggering 344% year-over-year increase, resulting in an operating loss of $31 million, highlighting the pressure high costs place on profitability.
- Rising Debt Burden: The company exited Q2 with over $2.6 billion in debt, a substantial rise from $688 million the previous year, and if debt accumulation continues, it may face financial difficulties, prompting investors to carefully assess the associated risks.
See More
Applied Digital Board Member Sells Shares Amid AI Boom
- Transaction Overview: Board member Chuck Hastings sold 45,987 shares of Applied Digital on January 29, 2026, at $38.57 per share, totaling $1.8 million, indicating a liquidity realization following a significant stock price surge.
- Holding Analysis: Post-sale, Hastings retains 388,372 shares valued at approximately $14.8 million, with the shares sold representing 10.59% of his holdings, which is below his recent median of 12.66%, suggesting a declining share base.
- Market Context: The transaction occurred when Applied Digital's stock had appreciated by 399.32% over the past year, reflecting Hastings' decision to capitalize on the stock reaching a 52-week high of $42.27, demonstrating his market timing acumen.
- Company Financial Performance: Applied Digital reported a staggering 250% year-over-year revenue growth in its fiscal second quarter, reaching $126.6 million, despite a net income of -$127.62 million, highlighting robust demand in the AI infrastructure sector.
See More
Applied Digital: The Rise of AI Data Centers
- Surging Market Demand: According to a McKinsey study, total data center expenditures could reach $7 trillion by 2030, with the majority allocated to AI, highlighting a strong demand for high-performance computing infrastructure that Applied Digital is poised to capitalize on.
- Data Center Construction Plans: Applied Digital is building two AI data center campuses, Polaris Forge 1 and Polaris Forge 2, with total capacities of 450 megawatts and 300 megawatts respectively, expected to be completed by 2027, which will significantly enhance the company's revenue potential.
- Lease Agreements Yielding Revenue: The company has signed lease deals with CoreWeave totaling $11 billion over 15 years, along with another unnamed AI company for approximately $5 billion, providing a stable cash flow that supports its growth strategy.
- Stock Surge and Valuation: Over the past 18 months, Applied Digital's stock has surged by 700%, pushing its market cap to $9.5 billion; despite cash flow pressures and reliance on large deals, analysts project revenues of $346 million for fiscal 2026 and $535 million for fiscal 2027.
See More
January's Most Searched Stock Rankings Analysis
- Ranking Changes: In January, iShares Silver Trust, Brand Engagement Network, Intel, and Applied Digital entered the top ten for the first time, indicating a rising market interest in precious metals and tech stocks, which could influence investors' asset allocation strategies.
- iShares Silver Trust Performance: With a current price of $80.65 and a year-to-date return of +22.6%, it narrowly trailed Tesla for second place in January, suggesting increasing investor interest in precious metals that may lead to future capital inflows.
- Tech Stock Dynamics: Meta and Apple rose three and one spots respectively, with current prices of $697.54 and $268.87, reflecting the sustained appeal of large tech stocks in the market, which may affect investors' portfolio choices.
- Market Trend Observation: Despite declines in NVIDIA and Invesco QQQ Trust, the rising interest in Silver ETFs suggests that investors may reassess the value of tech stocks while seeking diversified investments.
See More
Rapid Growth in AI Infrastructure Market
- Surging Market Demand: The AI infrastructure market is projected to grow from $59 billion in 2025 to $356 billion by 2032, indicating a strong demand for high-performance data centers that is driving rapid expansion among cloud infrastructure companies.
- Applied Digital's Performance Surge: Applied Digital's stock rose nearly 500% over the past year, with a 250% year-over-year revenue increase to $126.6 million in Q2, and despite over $2.6 billion in debt, new leases worth $16 billion will further boost revenue growth.
- CoreWeave's Strong Performance: CoreWeave achieved record revenue of $1.4 billion in Q3, up from $583.9 million year-over-year, and its $6.3 billion partnership with Nvidia provides additional market security, mitigating the risk of demand decline.
- Investment Value Comparison: While Applied Digital shows significant sales growth, its gross profit is only $26 million due to high costs, whereas CoreWeave's gross profit is nearly $1 billion, and its lower forward price-to-sales ratio indicates it is the better investment choice in the current market landscape.
See More
Applied Digital's Stock Soars Amid AI Demand but Faces Significant Risks
- Significant Sales Growth: In its fiscal Q2 2026, Applied Digital reported a 250% surge in sales to nearly $127 million, highlighting its strong performance amid soaring demand for AI infrastructure; however, the rapid sales growth has not translated into profitability, as the company faces high expenditure pressures.
- Leasing Agreement Potential: The multi-year leasing agreements with CoreWeave are projected to generate up to $16 billion in revenue over 15 years, providing a stable cash flow source for the company, but this also hinges on the continued growth of the AI market.
- Expenditure and Loss Issues: Despite the significant sales increase, Applied Digital's total expenses rose by 230% in the same quarter to nearly $158 million, resulting in a non-GAAP diluted loss of $0.07 per share, reflecting severe challenges in achieving profitability.
- Overvaluation Concerns: With a price-to-sales ratio of about 31, significantly higher than the tech sector average of 9, it indicates that investors are overpaying for an AI company that has yet to achieve profitability, suggesting potential downward pressure on the stock price and caution for investors considering holding the stock.
See More
AI Drives Explosive Growth in Data Center Sector
- Surging Market Demand: The rise of AI technology has led to an explosive demand for data centers, with Applied Digital's stock soaring nearly 500% over the past 12 months to a 52-week high of $42.27, indicating strong market demand for its services.
- Expanding Customer Base: In its fiscal second quarter, Applied Digital reported sales of $126.6 million, a remarkable 250% increase year-over-year, with major client CoreWeave signing long-term leases worth approximately $11 billion, showcasing the company's robust growth potential in the AI infrastructure market.
- Increasing Financial Challenges: Despite significant sales growth, Applied Digital's cost of revenue reached $100.6 million in Q2, a staggering 344% year-over-year increase, resulting in an operating loss of $31 million, highlighting the pressure high costs place on profitability.
- Rising Debt Burden: The company exited Q2 with over $2.6 billion in debt, a substantial rise from $688 million the previous year, and if debt accumulation continues, it may face financial difficulties, prompting investors to carefully assess the associated risks.
See More
Applied Digital Board Member Sells Shares Amid AI Boom
- Transaction Overview: Board member Chuck Hastings sold 45,987 shares of Applied Digital on January 29, 2026, at $38.57 per share, totaling $1.8 million, indicating a liquidity realization following a significant stock price surge.
- Holding Analysis: Post-sale, Hastings retains 388,372 shares valued at approximately $14.8 million, with the shares sold representing 10.59% of his holdings, which is below his recent median of 12.66%, suggesting a declining share base.
- Market Context: The transaction occurred when Applied Digital's stock had appreciated by 399.32% over the past year, reflecting Hastings' decision to capitalize on the stock reaching a 52-week high of $42.27, demonstrating his market timing acumen.
- Company Financial Performance: Applied Digital reported a staggering 250% year-over-year revenue growth in its fiscal second quarter, reaching $126.6 million, despite a net income of -$127.62 million, highlighting robust demand in the AI infrastructure sector.
See More
Applied Digital: The Rise of AI Data Centers
- Surging Market Demand: According to a McKinsey study, total data center expenditures could reach $7 trillion by 2030, with the majority allocated to AI, highlighting a strong demand for high-performance computing infrastructure that Applied Digital is poised to capitalize on.
- Data Center Construction Plans: Applied Digital is building two AI data center campuses, Polaris Forge 1 and Polaris Forge 2, with total capacities of 450 megawatts and 300 megawatts respectively, expected to be completed by 2027, which will significantly enhance the company's revenue potential.
- Lease Agreements Yielding Revenue: The company has signed lease deals with CoreWeave totaling $11 billion over 15 years, along with another unnamed AI company for approximately $5 billion, providing a stable cash flow that supports its growth strategy.
- Stock Surge and Valuation: Over the past 18 months, Applied Digital's stock has surged by 700%, pushing its market cap to $9.5 billion; despite cash flow pressures and reliance on large deals, analysts project revenues of $346 million for fiscal 2026 and $535 million for fiscal 2027.
See More
January's Most Searched Stock Rankings Analysis
- Ranking Changes: In January, iShares Silver Trust, Brand Engagement Network, Intel, and Applied Digital entered the top ten for the first time, indicating a rising market interest in precious metals and tech stocks, which could influence investors' asset allocation strategies.
- iShares Silver Trust Performance: With a current price of $80.65 and a year-to-date return of +22.6%, it narrowly trailed Tesla for second place in January, suggesting increasing investor interest in precious metals that may lead to future capital inflows.
- Tech Stock Dynamics: Meta and Apple rose three and one spots respectively, with current prices of $697.54 and $268.87, reflecting the sustained appeal of large tech stocks in the market, which may affect investors' portfolio choices.
- Market Trend Observation: Despite declines in NVIDIA and Invesco QQQ Trust, the rising interest in Silver ETFs suggests that investors may reassess the value of tech stocks while seeking diversified investments.
See More
Rapid Growth in AI Infrastructure Market
- Surging Market Demand: The AI infrastructure market is projected to grow from $59 billion in 2025 to $356 billion by 2032, indicating a strong demand for high-performance data centers that is driving rapid expansion among cloud infrastructure companies.
- Applied Digital's Performance Surge: Applied Digital's stock rose nearly 500% over the past year, with a 250% year-over-year revenue increase to $126.6 million in Q2, and despite over $2.6 billion in debt, new leases worth $16 billion will further boost revenue growth.
- CoreWeave's Strong Performance: CoreWeave achieved record revenue of $1.4 billion in Q3, up from $583.9 million year-over-year, and its $6.3 billion partnership with Nvidia provides additional market security, mitigating the risk of demand decline.
- Investment Value Comparison: While Applied Digital shows significant sales growth, its gross profit is only $26 million due to high costs, whereas CoreWeave's gross profit is nearly $1 billion, and its lower forward price-to-sales ratio indicates it is the better investment choice in the current market landscape.
See More
