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Will Applied Digital's Pivot to AI Infrastructure Broaden Its Revenue Base?
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Key Takeaways
Applied Digital is pivoting to AI compute infrastructure with long-term, contract-based lease revenues.
APLD has begun building Polaris Forge 2, a 300-MW campus optimised for AI workloads.
Zacks consensus estimate pegs Q2 fiscal 2026 loss at 11cents per share, wider by a cent over the past 30 days.
Applied Digital (APLD - Free Report) is deepening its strategic shift from blockchain hosting towards high-performance computing infrastructure designed for artificial intelligence(AI) workloads. This evolution signals a structural reorientation of its business model toward long-term, contract-based revenue streams and away from cyclical crypto-driven demand.
APLD’s growing presence across North Dakota anchors this transition. Its fully leased 400-megawatt Polaris Forge 1 campus represents over $11 billion in contracted lease value, offering multi-year visibility and validating Applied Digital’s technical and operational capabilities. Building on this foundation, APLD has commenced construction of Polaris Forge 2, a 300-MW AI-optimised facility near Harwood. The new campus is engineered for scalable expansion, positioning Applied Digital to serve hyperscalers seeking purpose-built, liquid-cooled capacity for next-generation AI systems. Together, these developments illustrate how APLD is transitioning into a key enabler of large-scale AI compute infrastructure.
However, the financial transition remains in progress. The Zacks Consensus Estimate for the second quarter fiscal 2026 revenue is pegged at $63.5 million, implying a 0.66% year-over-year decline as construction-driven income tapers and lease revenue begins to ramp. This moderation reflects a timing reset rather than weakness. As recurring contracts start contributing, Applied Digital’s earnings profile is expected to become more stable and margin-accretive. The company’s next phase hinges on disciplined execution — balancing capital efficiency, timely project delivery and deeper penetration across hyperscaler clients — to translate its AI infrastructure investments into durable, recurring growth.
APLD Faces Stiff Competition in the AI Infrastructure Space
Applied Digital competes with emerging and established players such as Riot Platforms(RIOT - Free Report) and Equinix(EQIX - Free Report) in the fast-expanding AI data centre market. Riot Platforms is scaling beyond crypto mining with new high-performance computing facilities exceeding 1 gigawatt of planned capacity to support AI workloads. Equinix, meanwhile, operates over 260 global data centres, leveraging its xScale portfolio to serve hyperscalers seeking power-dense infrastructure. Both Riot Platforms and Equinix have scale and strong customer ecosystems, while Applied Digital’s strength lies in its purpose-built, liquid-cooled architecture and faster deployment timelines. These factors could help APLD compete more efficiently for AI-driven infrastructure demand.
Applied Digital shares have skyrocketed 300.8% year to date, outperforming the broader Zacks Finance sector’s return of 12.4% and the Zacks Financial-Miscellaneous Services industry’s modest appreciation of 0.6%.
APLD Stock’s Performance
Image Source: Zacks Investment Research
Applied Digital stock is overvalued, with a forward 12-month price/sales of 23.21X compared with the broader sector’s 9.26X. APLD has a Value Score of F.
APLD Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the second-quarter fiscal 2026 loss is pegged at 11 cents per share, wider by a penny over the past 30 days. Applied Digital reported a loss of 66 cents per share in the year-ago quarter.
Image: Bigstock
Will Applied Digital's Pivot to AI Infrastructure Broaden Its Revenue Base?
Key Takeaways
Applied Digital (APLD - Free Report) is deepening its strategic shift from blockchain hosting towards high-performance computing infrastructure designed for artificial intelligence(AI) workloads. This evolution signals a structural reorientation of its business model toward long-term, contract-based revenue streams and away from cyclical crypto-driven demand.
APLD’s growing presence across North Dakota anchors this transition. Its fully leased 400-megawatt Polaris Forge 1 campus represents over $11 billion in contracted lease value, offering multi-year visibility and validating Applied Digital’s technical and operational capabilities. Building on this foundation, APLD has commenced construction of Polaris Forge 2, a 300-MW AI-optimised facility near Harwood. The new campus is engineered for scalable expansion, positioning Applied Digital to serve hyperscalers seeking purpose-built, liquid-cooled capacity for next-generation AI systems. Together, these developments illustrate how APLD is transitioning into a key enabler of large-scale AI compute infrastructure.
However, the financial transition remains in progress. The Zacks Consensus Estimate for the second quarter fiscal 2026 revenue is pegged at $63.5 million, implying a 0.66% year-over-year decline as construction-driven income tapers and lease revenue begins to ramp. This moderation reflects a timing reset rather than weakness. As recurring contracts start contributing, Applied Digital’s earnings profile is expected to become more stable and margin-accretive. The company’s next phase hinges on disciplined execution — balancing capital efficiency, timely project delivery and deeper penetration across hyperscaler clients — to translate its AI infrastructure investments into durable, recurring growth.
APLD Faces Stiff Competition in the AI Infrastructure Space
Applied Digital competes with emerging and established players such as Riot Platforms(RIOT - Free Report) and Equinix(EQIX - Free Report) in the fast-expanding AI data centre market. Riot Platforms is scaling beyond crypto mining with new high-performance computing facilities exceeding 1 gigawatt of planned capacity to support AI workloads. Equinix, meanwhile, operates over 260 global data centres, leveraging its xScale portfolio to serve hyperscalers seeking power-dense infrastructure. Both Riot Platforms and Equinix have scale and strong customer ecosystems, while Applied Digital’s strength lies in its purpose-built, liquid-cooled architecture and faster deployment timelines. These factors could help APLD compete more efficiently for AI-driven infrastructure demand.
APLD’s Share Price Performance, Valuation & Estimates
Applied Digital shares have skyrocketed 300.8% year to date, outperforming the broader Zacks Finance sector’s return of 12.4% and the Zacks Financial-Miscellaneous Services industry’s modest appreciation of 0.6%.
APLD Stock’s Performance
Image Source: Zacks Investment Research
Applied Digital stock is overvalued, with a forward 12-month price/sales of 23.21X compared with the broader sector’s 9.26X. APLD has a Value Score of F.
APLD Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the second-quarter fiscal 2026 loss is pegged at 11 cents per share, wider by a penny over the past 30 days. Applied Digital reported a loss of 66 cents per share in the year-ago quarter.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
Applied Digital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.