Applied Digital Reports Strong Earnings Amid AI Infrastructure Boom
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy APLD?
Source: Fool
- Significant Revenue Growth: Applied Digital reported a 139% year-over-year revenue increase to $127 million in its latest quarter, indicating strong demand and potential for business expansion in the AI infrastructure market.
- Capital Raising Risks: The company completed a $2.15 billion capital raise at a 6.75% interest rate, which, despite its high cost, provides necessary funding for future data center construction, potentially leading to stable cash flows in the future.
- Data Center Expansion Plans: Applied Digital is constructing the Delta Forge 1 data center with a planned capacity of 430 megawatts, while currently operating only a 100-megawatt facility, which will significantly enhance its market share and service capabilities in the future.
- Market Rebound Potential: Despite a previous decline of over 30% in stock price, Applied Digital's shares have rapidly rebounded following the strong earnings report, reflecting market confidence in its long-term growth potential.
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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: 30.090
Low
36.00
Averages
52.22
High
99.00
Current: 30.090
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.
Applied Digital Reports Strong Earnings Amid AI Infrastructure Boom
- Significant Revenue Growth: Applied Digital reported a 139% year-over-year revenue increase to $127 million in its latest quarter, indicating strong demand and potential for business expansion in the AI infrastructure market.
- Capital Raising Risks: The company completed a $2.15 billion capital raise at a 6.75% interest rate, which, despite its high cost, provides necessary funding for future data center construction, potentially leading to stable cash flows in the future.
- Data Center Expansion Plans: Applied Digital is constructing the Delta Forge 1 data center with a planned capacity of 430 megawatts, while currently operating only a 100-megawatt facility, which will significantly enhance its market share and service capabilities in the future.
- Market Rebound Potential: Despite a previous decline of over 30% in stock price, Applied Digital's shares have rapidly rebounded following the strong earnings report, reflecting market confidence in its long-term growth potential.
See More
Applied Digital's Rapid Growth Amid Debt Risks
- Significant Revenue Growth: Applied Digital reported a 139% year-over-year revenue increase to $127 million in its latest quarter, demonstrating strong market performance amid surging AI infrastructure demand, though investors must remain cautious of its debt risks.
- Capital Raising Details: The company recently completed a $2.15 billion capital raise at a 6.75% interest rate, indicating market caution regarding its future growth while highlighting the substantial funding required for its expansion plans.
- Data Center Development: Applied Digital is actively constructing several AI-focused data centers, with the Delta Forge 1 project underway at 430 megawatts, and although only a 100-megawatt facility is currently operational, the future growth potential is significant.
- Market Positioning and Risks: While Applied Digital's business model resembles that of a real estate investment trust by leasing data center capacity for profit, its high debt levels could impact long-term financial stability, necessitating careful evaluation of its investment value.
See More
Investment Opportunities in AI Infrastructure
- Market Growth Potential: CoreWeave and Nebius, classified as neocloud companies, focus on providing AI computing power, achieving year-over-year growth rates of 110% and 547% respectively, indicating strong demand and future investment potential in this sector.
- Nebius Financial Performance: Nebius reported fourth-quarter revenue of $228 million and expects its annual revenue to soar from $1.25 billion to between $7 billion and $9 billion by the end of 2026, showcasing the increasing popularity and market appeal of its services.
- CoreWeave's Robust Business: Although growing at a slower pace than Nebius, CoreWeave still achieved a 110% year-over-year revenue increase to $1.6 billion in Q4, with expectations of recognizing at least $28 billion in revenue over the next 24 months, reflecting strong market demand and business momentum.
- Applied Digital's Growth Outlook: Applied Digital's revenue surged 139% year-over-year to $127 million in Q3 of its 2026 fiscal year, with future growth projected at 94%, and secured multi-year contracts ensuring the long-term viability of its data center business.
See More
Surge in Demand for AI Infrastructure
- Company Growth Rates: Nebius achieved a staggering 547% year-over-year growth in Q4, with revenue hitting $228 million, and is projected to soar from a $1.25 billion annual run rate to between $7 billion and $9 billion by the end of 2026, showcasing strong demand for its services and market potential.
- CoreWeave Performance: CoreWeave reported a 110% year-over-year revenue increase in Q4, reaching $1.6 billion, and expects to recognize at least $28 billion in revenue over the next 24 months, indicating robust performance and demand in the AI computing sector.
- Applied Digital Results: Applied Digital's revenue surged 139% year-over-year in Q3 of its 2026 fiscal year to $127 million, with future growth expected at 94% this year and 49% next year, reflecting the immense demand for data center space and the company's growth potential.
- Market Outlook: As AI infrastructure rapidly evolves, companies like CoreWeave, Nebius, and Applied Digital are becoming focal points for investors, particularly in a high-growth sector where they demonstrate strong profitability and competitive positioning.
See More
Applied Digital's Stock Surge Reflects Growth Potential
- Significant Investment Returns: An investment of $1,000 in Applied Digital shares has surged to over $5,500 in the past year, showcasing its strong growth potential, despite a 27% decline from its 52-week high this year.
- Robust Revenue Growth: In Q3 of fiscal 2026, Applied Digital reported a 139% year-over-year revenue increase to $126.6 million, with an adjusted profit of $0.09 per share, exceeding Wall Street expectations and indicating improving profitability.
- Long-Term Contract Security: The company has secured $16 billion in long-term lease contracts with clients like CoreWeave, and once it completes the construction of 600 MW of data centers, its annual revenue could easily surpass $1 billion, ensuring future revenue stability.
- Strong Market Demand: Applied Digital is constructing a 300 MW AI factory expected to begin operations by mid-2027, and with the surging demand for AI computing capacity, the company is likely to secure additional long-term lease contracts, further enhancing its revenue outlook.
See More
Applied Digital Restructures Leases to Lower Capital Costs
- Lower Capital Costs: Applied Digital (APLD) has restructured its leases with CoreWeave (CRWV) for its North Dakota data centers, resulting in lenders now being backed by investment-grade credit, which is expected to lower the cost of project-level debt over time.
- Credit Rating Impact: Needham analysts noted that this restructuring could lead to more favorable financing terms for APLD, especially if the compute capacity leased from CRWV is ultimately supported by investment-grade entities like Meta or Anthropic.
- Positive Market Outlook: Needham has assigned a Buy rating to Applied Digital while maintaining a Hold rating on CoreWeave, indicating confidence in APLD's growth potential while reflecting caution regarding CRWV's financial stability.
- Industry Dynamics Analysis: CoreWeave's rapid growth in the AI infrastructure sector has attracted investor interest, and despite facing significant cash costs, analysts believe that partnerships with major tech companies will create more opportunities for the firm.
See More
Applied Digital Reports Strong Earnings Amid AI Infrastructure Boom
- Significant Revenue Growth: Applied Digital reported a 139% year-over-year revenue increase to $127 million in its latest quarter, indicating strong demand and potential for business expansion in the AI infrastructure market.
- Capital Raising Risks: The company completed a $2.15 billion capital raise at a 6.75% interest rate, which, despite its high cost, provides necessary funding for future data center construction, potentially leading to stable cash flows in the future.
- Data Center Expansion Plans: Applied Digital is constructing the Delta Forge 1 data center with a planned capacity of 430 megawatts, while currently operating only a 100-megawatt facility, which will significantly enhance its market share and service capabilities in the future.
- Market Rebound Potential: Despite a previous decline of over 30% in stock price, Applied Digital's shares have rapidly rebounded following the strong earnings report, reflecting market confidence in its long-term growth potential.
See More
Applied Digital's Rapid Growth Amid Debt Risks
- Significant Revenue Growth: Applied Digital reported a 139% year-over-year revenue increase to $127 million in its latest quarter, demonstrating strong market performance amid surging AI infrastructure demand, though investors must remain cautious of its debt risks.
- Capital Raising Details: The company recently completed a $2.15 billion capital raise at a 6.75% interest rate, indicating market caution regarding its future growth while highlighting the substantial funding required for its expansion plans.
- Data Center Development: Applied Digital is actively constructing several AI-focused data centers, with the Delta Forge 1 project underway at 430 megawatts, and although only a 100-megawatt facility is currently operational, the future growth potential is significant.
- Market Positioning and Risks: While Applied Digital's business model resembles that of a real estate investment trust by leasing data center capacity for profit, its high debt levels could impact long-term financial stability, necessitating careful evaluation of its investment value.
See More
Investment Opportunities in AI Infrastructure
- Market Growth Potential: CoreWeave and Nebius, classified as neocloud companies, focus on providing AI computing power, achieving year-over-year growth rates of 110% and 547% respectively, indicating strong demand and future investment potential in this sector.
- Nebius Financial Performance: Nebius reported fourth-quarter revenue of $228 million and expects its annual revenue to soar from $1.25 billion to between $7 billion and $9 billion by the end of 2026, showcasing the increasing popularity and market appeal of its services.
- CoreWeave's Robust Business: Although growing at a slower pace than Nebius, CoreWeave still achieved a 110% year-over-year revenue increase to $1.6 billion in Q4, with expectations of recognizing at least $28 billion in revenue over the next 24 months, reflecting strong market demand and business momentum.
- Applied Digital's Growth Outlook: Applied Digital's revenue surged 139% year-over-year to $127 million in Q3 of its 2026 fiscal year, with future growth projected at 94%, and secured multi-year contracts ensuring the long-term viability of its data center business.
See More
Surge in Demand for AI Infrastructure
- Company Growth Rates: Nebius achieved a staggering 547% year-over-year growth in Q4, with revenue hitting $228 million, and is projected to soar from a $1.25 billion annual run rate to between $7 billion and $9 billion by the end of 2026, showcasing strong demand for its services and market potential.
- CoreWeave Performance: CoreWeave reported a 110% year-over-year revenue increase in Q4, reaching $1.6 billion, and expects to recognize at least $28 billion in revenue over the next 24 months, indicating robust performance and demand in the AI computing sector.
- Applied Digital Results: Applied Digital's revenue surged 139% year-over-year in Q3 of its 2026 fiscal year to $127 million, with future growth expected at 94% this year and 49% next year, reflecting the immense demand for data center space and the company's growth potential.
- Market Outlook: As AI infrastructure rapidly evolves, companies like CoreWeave, Nebius, and Applied Digital are becoming focal points for investors, particularly in a high-growth sector where they demonstrate strong profitability and competitive positioning.
See More
Applied Digital's Stock Surge Reflects Growth Potential
- Significant Investment Returns: An investment of $1,000 in Applied Digital shares has surged to over $5,500 in the past year, showcasing its strong growth potential, despite a 27% decline from its 52-week high this year.
- Robust Revenue Growth: In Q3 of fiscal 2026, Applied Digital reported a 139% year-over-year revenue increase to $126.6 million, with an adjusted profit of $0.09 per share, exceeding Wall Street expectations and indicating improving profitability.
- Long-Term Contract Security: The company has secured $16 billion in long-term lease contracts with clients like CoreWeave, and once it completes the construction of 600 MW of data centers, its annual revenue could easily surpass $1 billion, ensuring future revenue stability.
- Strong Market Demand: Applied Digital is constructing a 300 MW AI factory expected to begin operations by mid-2027, and with the surging demand for AI computing capacity, the company is likely to secure additional long-term lease contracts, further enhancing its revenue outlook.
See More
Applied Digital Restructures Leases to Lower Capital Costs
- Lower Capital Costs: Applied Digital (APLD) has restructured its leases with CoreWeave (CRWV) for its North Dakota data centers, resulting in lenders now being backed by investment-grade credit, which is expected to lower the cost of project-level debt over time.
- Credit Rating Impact: Needham analysts noted that this restructuring could lead to more favorable financing terms for APLD, especially if the compute capacity leased from CRWV is ultimately supported by investment-grade entities like Meta or Anthropic.
- Positive Market Outlook: Needham has assigned a Buy rating to Applied Digital while maintaining a Hold rating on CoreWeave, indicating confidence in APLD's growth potential while reflecting caution regarding CRWV's financial stability.
- Industry Dynamics Analysis: CoreWeave's rapid growth in the AI infrastructure sector has attracted investor interest, and despite facing significant cash costs, analysts believe that partnerships with major tech companies will create more opportunities for the firm.
See More
