- Revenue Soars: Q1 FY2026 sales jumped 84% YoY to $64.2M, far beating estimates [1] (analysts had pegged ~$50M [2]). Net loss was $27.8M ($0.11/share), but adjusted loss was only $7.6M ($0.03/share) [3].
- AI Deals Hit Stride: Applied Digital fully leased its Polaris Forge 1 campus (400 MW) to AI cloud specialist CoreWeave – locking in roughly $11 billion of 15-year lease revenue [4] [5]. In August, it added another 150 MW lease with CoreWeave, completing the 400 MW commitment [6].
- Huge Expansion Planned: The company just broke ground on Polaris Forge 2, a $3 billion, 280–300 MW AI-focused data center in North Dakota (with initial 200 MW online by 2026) [7] [8]. Management says it’s in advanced talks with a second hyperscale customer for this campus.
- Big Funding: Applied Digital drew a $112.5 M tranche from its $5 billion Macquarie credit facility to finish Polaris Forge 1, plus secured $50 M more for Polaris Forge 2, and raised ~$200 M of new Series G preferred stock [9].
- Stock Surge: APLD’s share price has exploded amid the AI hype – up over 200% YTD. It hit all-time closing highs (~$26.50) in early October [10], then rallied into the mid-$30s on Friday’s news. (Shares surged ~14% after-hours Oct 9 [11], and were trading around $35 pre-market Oct 10 [12].)
- Analyst Buzz: Wall Street is overwhelmingly bullish. About a dozen analysts rate APLD a “Buy,” with 12-month targets ranging from the mid-teens up to ~$30 [13]. Citizens JMP recently hiked its price target to $35 (from $18) after seeing the deal momentum [14]. Even The Motley Fool calls the data-center crunch a “huge opportunity” for APLD [15].
- AI Infrastructure Play: CEO Wes Cummins calls Applied Digital the “picks and shovels” of the AI era [16]. With hyperscalers set to pour roughly $350 billion into AI computing this year [17], Applied Digital’s cheap-power, high-density campuses (originally built for crypto) are in hot demand. Its Polaris Forge North Dakota complex can ultimately scale to 1 gigawatt of IT load [18], leveraging proprietary waterless cooling and low-cost grid power.
Overview: Dallas-based Applied Digital (NASDAQ: APLD) designs and operates high-performance data centers and cloud colocation – recently pivoting from crypto-mining hosting to AI and HPC (high-performance computing) workloads [19]. Its flagship Polaris Forge campus in North Dakota was even named “Best Data Center in the Americas 2025” by Datacloud [20]. In an AI-driven cloud boom, demand for such specialized capacity is running far ahead of supply, giving APLD a unique niche [21] [22].
Q1 Results (Aug 31, 2025): Applied Digital’s Q1 (fiscal) was nothing short of a breakout quarter. Revenues jumped 84% YoY to $64.2 million [23], thanks largely to tenant fit-out fees and higher occupancy. This handily exceeded the ~$50 million consensus (84% above prior-year $34.8M) [24]. The wider-than-expected revenue surge drove an adjusted EPS loss of only $0.03 (versus a consensus loss of $0.13), much better than feared [25]. On a GAAP basis, APLD reported a $27.8M net loss ($0.11/share) [26], steeper than last year due to heavy build-out spending. In Q1, costs of revenue soared 144% to $55.6M – largely reflecting ~$25M spent on deploying and readying facilities for AI clients [27]. Even so, the topline beat and slimmed losses (vs. much larger losses in prior quarters) was viewed positively. Reuters notes APLD’s Data Center Hosting division generated $37.9M of that revenue [28], indicating its campuses are rapidly filling up.
Applied Digital also provided operational updates. Most notably, the first 100 MW building at Polaris Forge 1 is on track to be operational by Q4 2025, with CoreWeave already fitting it out [29]. Management revealed that fit-out work alone contributed roughly $26M of revenue this quarter [30]. With leasing complete, Applied Digital expects Polaris Forge 1 (400 MW) to begin generating steady colocation income in the next 6–12 months.
Big Deals & Expansion: The Q1 report underscored Applied Digital’s massive backlog. In August the company signed an additional 150 MW lease with CoreWeave for Polaris Forge 1, locking the total committed IT load at 400 MW and pushing total contracted lease value to about $11 billion over ~15-year terms [31] [32]. (This includes the ~$7 billion from CoreWeave’s prior two 15-year leases announced earlier in 2025 [33].) As CEO Cummins notes, this third lease “validates our platform,” positioning Applied Digital to be “a trusted strategic partner to the world’s largest technology companies” [34]. Indeed, analysts at Roth Capital (cited by Reuters) expect APLD could seal another major HPC colocation deal by year-end [35], given the healthy pipeline of hyperscale interest.
Meanwhile, Applied Digital is accelerating its build-out. As part of a $3 billion plan unveiled in August, it has broken ground on Polaris Forge 2 – an AI-centric data center campus near Harwood, ND [36] [37]. The initial phase is two 150 MW buildings (300 MW total IT load), of which 200 MW will be available for tenant AI infrastructure in 2026, scaling to full 300 MW by 2027 [38] [39]. The Polaris Forge 2 site spans 900+ acres, with a power supply secured via regional cooperatives – a crucial advantage in a market where power availability for AI loads is tight [40]. Management hinted in the call that it is already in “advanced discussions” with an investment-grade hyperscaler to anchor this campus.
Capitalization & Funding: Funding has kept pace with these expansion plans. In early October, APLD drew an initial $112.5 million from its $5 billion preferred-equity partnership with Macquarie Asset Management, earmarked to complete Polaris Forge 1 [41]. It also raised roughly $50 million from Macquarie Equipment Capital for Polaris Forge 2, and in late September added $200 million via a new round of Series G preferred shares [42]. These moves greatly bolster APLD’s liquidity for the heavy construction ahead. (By quarter-end, pro-forma cash was ~$114M against $687M debt [43] – a balance sheet that observers note is leverage-heavy but typical for fast-growing data center firms.)
Market Reaction: Investors have been enthusiastic. Applied Digital’s stock has run from under $10 in early 2025 to the mid-$20s by early October – a >200% rally outpacing the broader market [44] [45]. The Q1 beat catalyzed yet another pop. APLD jumped roughly 14% in post-earnings trading (Thursday Oct 9) [46], topping $30 per share. In pre-market trading on Oct 10, APLD was up over 20% (around $35 [47]). (By contrast, many peers have stagnated or only modestly risen, underscoring the speculative fervor around this company.)
Experts are largely bullish but cautious on valuation. At last check, roughly 12 Wall Street analysts rated APLD a “Buy” [48]. Some firms have lifted their targets aggressively: for example, Citizens JMP doubled its price target to $35 (from $18) following the recent funding news [49]. Others like B. Riley, Compass Point, and Wells Fargo have also reiterated buy ratings through the year. Industry analysts note that the consensus target (around the low-$20s) was already eclipsed by late September [50] [51], reflecting the stock’s fast climb.
Notably, Applied Digital’s narrative has drawn comparisons to “gold rush” commodity plays. The Motley Fool recently remarked that hyperscaler data-center capacity is becoming scarce – which spells a “huge opportunity” for APLD, given its secured power and rapid-build capabilities [52]. Applied’s CEO has been vocal in this vein: he calls APLD the “modern-day picks and shovels of the intelligence era,” citing the colossal AI investment wave. [53]. Management even projects reaching ~$1 billion in operating profit (NOI) within five years [54].
Risks & Outlook: Despite the buzz, some experts urge caution. APLD’s fortunes hinge on executing a few very large leases. CoreWeave alone now accounts for the full Polaris Forge 1 campus, and Applied has only confirmed one (soon to be two) major deals so far [55]. Any delay or scaling back by that customer could dent projections. Likewise, the aggressive expansion is capital-intensive: the company has accumulated substantial debt and must continue raising equity to fund construction (it recently filed to sell another ~8.4 million shares [56]). On the tech side, the AI infrastructure market is fiercely competitive (from giants like Equinix to cloud providers building their own centers). One analyst warns that “the market may be ahead of fundamentals” [57], given that APLD is not yet profitable.
However, all eyes will be on the upcoming quarters. Analysts will look to see if Applied Digital can convert its colossal backlog into running revenue. Roth Capital and others expect the company could clinch additional hyperscale leases by year-end, which would further underwrite growth. Meanwhile, broader AI tailwinds remain strong: data from Reuters notes “businesses are racing to deploy next-generation AI models,” underpinning demand for APLD’s capacity [58].
Conclusion: In summary, Applied Digital stands at the center of the AI data-center boom. Its Q1 results and deals have validated an aggressive growth strategy – and the stock reflects that optimism. If management can deliver on its build-out and secure more large deals, APLD could indeed play a leading role in AI’s “infrastructure gold rush.” For now, analysts expect volatile but potentially explosive returns, as reflected in soaring targets (Citizens JMP’s $35, Goldman’s $30, etc.) [59] [60]. Investors should weigh this upside against execution risk and the stock’s high beta. The coming quarters – new campus launches, lease announcements, and further financials – will be key tests of whether Applied Digital can justify the hype.
Sources: Applied Digital IR filings [61] [62] [63]; Reuters [64] [65]; Investing.com [66] [67]; TipRanks/TheFly [68]; TechSpace2 (analysis) [69] [70]; Market news coverage [71] [72]. These sources provide the detailed financials, quotes, and analysis above.
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