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Liquid Cooling and 12-14-Month Build: Durable Bets for APLD Stock?
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Key Takeaways
APLD secured $16B in long-term leases with CoreWeave and a hyperscaler across two AI campuses.
Compressed build timelines and liquid cooling tech support APLD's high-density, AI-ready designs.
APLD aims to shift from low-margin installs to recurring rent as campuses hit lease revenue milestones.
Applied Digital’s (APLD - Free Report) pivot to AI data centers is coalescing around long-duration leases and a repeatable finance-and-build model. Water-efficient liquid cooling, speed to delivery and secured supply are the core design tenets. Near term, low-margin fit-out gives way to recurring rent as staged buildings reach lease revenues.
Why Power Density Matters Now for APLD
Constrained grid capacity and AI GPU loads reward designs that push efficiency and cooling. APLD targets direct-to-chip liquid cooling with a design PUE of 1.18 and near-zero water use, leveraging 200+ days of natural cooling in the Dakotas. Management frames these features as differentiators as hyperscaler investment accelerates. Across new campuses, the company is building for high-density AI while emphasizing water efficiency and supply chain certainty to keep schedules intact when power is scarce.
Ellendale (Polaris Forge 1) expanded to a fully leased 400 MW with CoreWeave (CRWV - Free Report) , supporting roughly $11 billion of contracted lease revenues over about 15 years. The first 100 MW is expected to start recognizing lease revenues toward the end of calendar 2025, followed by 150 MW in mid-2026 and another 150 MW in 2027.
At Polaris Forge 2 near Harwood, ND, APLD signed a lease with an investment-grade hyperscaler, covering 200 MW for about $5 billion over an estimated 15-year term, plus a right of first refusal on another 800 MW for the campus’ full 1 GW expansion potential. Initial capacity is slated to begin coming online in 2026, with full 300 MW at the initial phase expected in 2027.
APLD’s Execution Model Emphasizes Speed
APLD is compressing build timelines to 12-14 months from roughly 24 months and scaling parallel development, with about 700 MW under construction. This approach is designed to meet hyperscaler deployment windows while shifting revenues from one-time tenant installations to long-term rent.
Ready-for-Service (RFS) steps at Polaris Forge 1 show schedule adherence: 50 MW phases were achieved on Oct. 27 and Nov. 24, bringing Building 1 to its full 100 MW IT load.
APLD’s strategy lines up with where AI infrastructure is headed: power-dense, water-efficient liquid-cooled campuses delivered on compressed timelines. If the company continues to hit RFS deadlines and closes project financing on acceptable terms, the transition from installation revenues to durable rental cash flows should take hold as 2025 turns to 2026.
Applied Digital shares have appreciated a whopping 227.9% in the trailing 12 months, outperforming the broader Zacks Finance sector as well as peers, including Riot Platforms (RIOT - Free Report) and Equinix (EQIX - Free Report) . While the broader sector has returned 11.6%, shares of Riot Platforms have risen 33.2% over the same time frame. Equinix shares have declined 23.5%.
The Zacks Consensus Estimate for fiscal 2026 revenues is expected to be $280.9 million, suggesting 27% growth from the figure reported in fiscal 2026. The consensus mark for loss is pegged at 31 cents per share, an improvement of 3 cents over the past 30 days. APLD reported loss of 80 cents in fiscal 2025.
Riot Platforms is expanding beyond crypto into high performance computing, with plans exceeding 1 GW to support AI workloads. That escalation raises the bar on speed, power density and cost of delivery for all players targeting hyperscaler leases.
Equinix operates a global platform of more than 260 data centers via its core and xScale portfolios that serve hyperscalers seeking power-dense capacity, sharpening competition for AI-ready space and timelines.
Image: Bigstock
Liquid Cooling and 12-14-Month Build: Durable Bets for APLD Stock?
Key Takeaways
Applied Digital’s (APLD - Free Report) pivot to AI data centers is coalescing around long-duration leases and a repeatable finance-and-build model. Water-efficient liquid cooling, speed to delivery and secured supply are the core design tenets. Near term, low-margin fit-out gives way to recurring rent as staged buildings reach lease revenues.
Why Power Density Matters Now for APLD
Constrained grid capacity and AI GPU loads reward designs that push efficiency and cooling. APLD targets direct-to-chip liquid cooling with a design PUE of 1.18 and near-zero water use, leveraging 200+ days of natural cooling in the Dakotas. Management frames these features as differentiators as hyperscaler investment accelerates. Across new campuses, the company is building for high-density AI while emphasizing water efficiency and supply chain certainty to keep schedules intact when power is scarce.
Ellendale (Polaris Forge 1) expanded to a fully leased 400 MW with CoreWeave (CRWV - Free Report) , supporting roughly $11 billion of contracted lease revenues over about 15 years. The first 100 MW is expected to start recognizing lease revenues toward the end of calendar 2025, followed by 150 MW in mid-2026 and another 150 MW in 2027.
At Polaris Forge 2 near Harwood, ND, APLD signed a lease with an investment-grade hyperscaler, covering 200 MW for about $5 billion over an estimated 15-year term, plus a right of first refusal on another 800 MW for the campus’ full 1 GW expansion potential. Initial capacity is slated to begin coming online in 2026, with full 300 MW at the initial phase expected in 2027.
APLD’s Execution Model Emphasizes Speed
APLD is compressing build timelines to 12-14 months from roughly 24 months and scaling parallel development, with about 700 MW under construction. This approach is designed to meet hyperscaler deployment windows while shifting revenues from one-time tenant installations to long-term rent.
Ready-for-Service (RFS) steps at Polaris Forge 1 show schedule adherence: 50 MW phases were achieved on Oct. 27 and Nov. 24, bringing Building 1 to its full 100 MW IT load.
APLD’s strategy lines up with where AI infrastructure is headed: power-dense, water-efficient liquid-cooled campuses delivered on compressed timelines. If the company continues to hit RFS deadlines and closes project financing on acceptable terms, the transition from installation revenues to durable rental cash flows should take hold as 2025 turns to 2026.
APLD Shares Outperform Sector, Estimate Revision Positive
Applied Digital shares have appreciated a whopping 227.9% in the trailing 12 months, outperforming the broader Zacks Finance sector as well as peers, including Riot Platforms (RIOT - Free Report) and Equinix (EQIX - Free Report) . While the broader sector has returned 11.6%, shares of Riot Platforms have risen 33.2% over the same time frame. Equinix shares have declined 23.5%.
The Zacks Consensus Estimate for fiscal 2026 revenues is expected to be $280.9 million, suggesting 27% growth from the figure reported in fiscal 2026. The consensus mark for loss is pegged at 31 cents per share, an improvement of 3 cents over the past 30 days. APLD reported loss of 80 cents in fiscal 2025.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
Competitive Landscape is Heating Up for APLD
Riot Platforms is expanding beyond crypto into high performance computing, with plans exceeding 1 GW to support AI workloads. That escalation raises the bar on speed, power density and cost of delivery for all players targeting hyperscaler leases.
Equinix operates a global platform of more than 260 data centers via its core and xScale portfolios that serve hyperscalers seeking power-dense capacity, sharpening competition for AI-ready space and timelines.
Zacks Rank
Applied Digital currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.