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APLD's ability to convert new AI campuses into revenue will be tested as multiple sites scale simultaneously.
Applied Digital (APLD - Free Report) stands at a pivotal juncture as its expanding AI infrastructure portfolio transitions from development to revenue generation. With Polaris Forge1 beginning operations and multiple new campuses under construction, the company's ability to convert infrastructure momentum into sustained revenue growth throughout 2026 represents a critical test of execution in the hyperscale data center market.
The broader industry environment supports aggressive expansion. Hyperscalers are deploying an estimated $350 billion annually toward AI infrastructure, yet the supply of GPU-ready data centers capable of supporting advanced workloads remains constrained. This demand-supply imbalance creates favorable conditions for developers who can deliver power-dense facilities at scale, particularly as data center availability has emerged as the primary bottleneck in AI deployment rather than GPU procurement.
APLD's infrastructure pipeline positions the company to capitalize on this demand. The Polaris Forge 1 campus holds an expanded 400-megawatt CoreWeave lease valued at about $11 billion over 15 years, with the first phase now operational and subsequent buildings progressing toward completion. APLD projects that this campus will generate roughly $500 million in annual net operating income once fully online. Beyond this anchor asset, Polaris Forge 2 has commenced construction with an initial 300-megawatt capacity, backed by Macquarie financing.
The company maintains a 4-gigawatt active development pipeline and has entered negotiations with additional hyperscalers for two new locations. APLD's proprietary cooling system, targeting 1.18 power usage effectiveness with minimal water consumption, offers operational efficiency advantages aligned with sustainability requirements. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $280.9 million, indicating 26.99% year-over-year growth.
However, execution challenges remain as the company scales simultaneously across multiple sites. The timing of lease agreements for Polaris Forge 2 and new locations, construction timeline adherence across 700 megawatts currently under development and the pace at which completed facilities convert to revenue-generating operations will determine whether APLD's infrastructure momentum delivers meaningful revenue acceleration in 2026.
APLD Faces Stiff Competition
APLD faces intensifying competition from Riot Platforms (RIOT - Free Report) and Equinix (EQIX - Free Report) in the AI infrastructure buildout. Riot Platforms is pivoting from blockchain hosting to high-density compute, leveraging its Texas power infrastructure to target hyperscaler contracts similar to those APLD pursues. Riot Platforms' operational experience in energy-intensive computing creates direct overlap with APLD's development strategy. Equinix offers contrasting competitive pressure through global scale, established hyperscaler relationships and proven data center operations. Equinix is retrofitting existing facilities for AI workloads while expanding purpose-built capacity, combining market presence with technical capabilities that intensify competitive dynamics as APLD scales throughout 2026.
Applied Digital shares have skyrocketed 212.6% in the past six months, outperforming the broader Zacks Finance sector’s return of 9.3% and the Zacks Financial-Miscellaneous Services industry’s decline of 11.1%.
APLD Stock’s Performance
Image Source: Zacks Investment Research
Applied Digital stock is overvalued, with a forward 12-month price/sales of 19.26X compared with the broader sector’s 9.08X. APLD has a Value Score of F.
APLD’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 loss is pegged at 31 cents per share, unchanged over the past 30 days. Applied Digital reported a loss of 80 cents per share in the previous year.
Image: Bigstock
Can APLD's AI Infrastructure Momentum Drive Revenue Growth in 2026?
Key Takeaways
Applied Digital (APLD - Free Report) stands at a pivotal juncture as its expanding AI infrastructure portfolio transitions from development to revenue generation. With Polaris Forge1 beginning operations and multiple new campuses under construction, the company's ability to convert infrastructure momentum into sustained revenue growth throughout 2026 represents a critical test of execution in the hyperscale data center market.
The broader industry environment supports aggressive expansion. Hyperscalers are deploying an estimated $350 billion annually toward AI infrastructure, yet the supply of GPU-ready data centers capable of supporting advanced workloads remains constrained. This demand-supply imbalance creates favorable conditions for developers who can deliver power-dense facilities at scale, particularly as data center availability has emerged as the primary bottleneck in AI deployment rather than GPU procurement.
APLD's infrastructure pipeline positions the company to capitalize on this demand. The Polaris Forge 1 campus holds an expanded 400-megawatt CoreWeave lease valued at about $11 billion over 15 years, with the first phase now operational and subsequent buildings progressing toward completion. APLD projects that this campus will generate roughly $500 million in annual net operating income once fully online. Beyond this anchor asset, Polaris Forge 2 has commenced construction with an initial 300-megawatt capacity, backed by Macquarie financing.
The company maintains a 4-gigawatt active development pipeline and has entered negotiations with additional hyperscalers for two new locations. APLD's proprietary cooling system, targeting 1.18 power usage effectiveness with minimal water consumption, offers operational efficiency advantages aligned with sustainability requirements. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $280.9 million, indicating 26.99% year-over-year growth.
However, execution challenges remain as the company scales simultaneously across multiple sites. The timing of lease agreements for Polaris Forge 2 and new locations, construction timeline adherence across 700 megawatts currently under development and the pace at which completed facilities convert to revenue-generating operations will determine whether APLD's infrastructure momentum delivers meaningful revenue acceleration in 2026.
APLD Faces Stiff Competition
APLD faces intensifying competition from Riot Platforms (RIOT - Free Report) and Equinix (EQIX - Free Report) in the AI infrastructure buildout. Riot Platforms is pivoting from blockchain hosting to high-density compute, leveraging its Texas power infrastructure to target hyperscaler contracts similar to those APLD pursues. Riot Platforms' operational experience in energy-intensive computing creates direct overlap with APLD's development strategy. Equinix offers contrasting competitive pressure through global scale, established hyperscaler relationships and proven data center operations. Equinix is retrofitting existing facilities for AI workloads while expanding purpose-built capacity, combining market presence with technical capabilities that intensify competitive dynamics as APLD scales throughout 2026.
APLD’s Share Price Performance, Valuation & Estimates
Applied Digital shares have skyrocketed 212.6% in the past six months, outperforming the broader Zacks Finance sector’s return of 9.3% and the Zacks Financial-Miscellaneous Services industry’s decline of 11.1%.
APLD Stock’s Performance
Image Source: Zacks Investment Research
Applied Digital stock is overvalued, with a forward 12-month price/sales of 19.26X compared with the broader sector’s 9.08X. APLD has a Value Score of F.
APLD’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 loss is pegged at 31 cents per share, unchanged over the past 30 days. Applied Digital reported a loss of 80 cents per share in the previous year.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
APLD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.