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APLD Strengthens Power and Cooling Stack: A Sign of More Upside?
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Key Takeaways
APLD invests $15M in Corintis cooling tech and secures $1.5B Babcock deal for 1 GW power by 2028.
Dedicated power and advanced cooling may accelerate lease starts, but execution risks remain elevated.
APLD's Data Center Hosting revenues hit $41.6M in fiscal Q2, up 15% YoY on reliable power delivery.
Applied Digital (APLD - Free Report) is addressing two core constraints in AI infrastructure development, power availability and thermal management, through targeted investments in cooling and energy solutions. APLD led a $25 million funding round in Corintis with a $15 million investment, while engaging Babcock & Wilcox Enterprises for accelerated power deployment. These moves build upon Applied Digital's existing infrastructure, which supported $41.6 million in Data Center Hosting revenues during the fiscal second quarter, up 15% year over year, demonstrating the operational relevance of reliable power delivery and thermal performance.
As AI chips scale to higher thermal loads, traditional cooling systems face rising obsolescence risks. Corintis' micro-channelled, direct-to-chip cold plates using microfluidic technology allow consistent liquid flow volumes across higher thermal densities. The technology supports up to three times lower temperatures compared to standard cold plates. For APLD, this may extend cooling system lifecycles as hyperscalers upgrade hardware, reducing reinvestment needs while improving flexibility across chip generations.
The Babcock & Wilcox engagement focuses on accelerating energy delivery timelines. In November 2025, Babcock signed a limited notice to proceed for a project valued over $1.5 billion to deliver 1 GW of power using four 300 MW natural gas-fired power plants, targeted to begin operations in 2028. For APLD, dedicated power generation reduces dependence on constrained utility connections and may accelerate lease commencements as hyperscalers prioritize guaranteed power availability.
However, execution risk rises as these initiatives scale. Corintis must prove commercial viability, while power solutions depend on utility and regulatory alignment. This comes as Applied Digital advances 600 megawatts of contracted capacity. The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $67.68 million, up 27.89% year over year, leaving upside tied to whether power availability and scalable cooling enable earlier energization, higher effective utilization and smoother conversion of contracted capacity into recognised hosting revenue.
APLD Faces Stiff Competition
Applied Digital faces competition in the power and cooling ecosystem from Vertiv (VRT - Free Report) and nVent Electric (NVT - Free Report) , both leveraged to rising AI-driven power density across hyperscale and enterprise data centers.
Vertiv benefits from higher rack densities through integrated power delivery and liquid cooling systems, while nVent Electric supports similar trends via electrical enclosures and power distribution components tied to higher watts per rack. Unlike Vertiv and nVent Electric, Applied Digital embeds power and cooling within owned campuses, using infrastructure control to support earlier energisation and more reliable conversion of contracted capacity into hosting revenue.
Applied Digital shares have skyrocketed 301.3% in the past six months, outperforming the broader Zacks Finance sector’s return of 8.5% and the Zacks Financial-Miscellaneous Services industry’s decline of 15.4%.
APLD Stock’s Performance
Image Source: Zacks Investment Research
Applied Digital stock is overvalued, with a forward 12-month price/sales of 24.36X compared with the broader sector’s 3.02X. APLD has a Value Score of F.
APLD’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for third-quarter fiscal 2026 loss is pegged at 9 cents per share, widening by 2 cents over the past 30 days. Applied Digital reported a loss of 16 cents per share in the previous year.
Image: Bigstock
APLD Strengthens Power and Cooling Stack: A Sign of More Upside?
Key Takeaways
Applied Digital (APLD - Free Report) is addressing two core constraints in AI infrastructure development, power availability and thermal management, through targeted investments in cooling and energy solutions. APLD led a $25 million funding round in Corintis with a $15 million investment, while engaging Babcock & Wilcox Enterprises for accelerated power deployment. These moves build upon Applied Digital's existing infrastructure, which supported $41.6 million in Data Center Hosting revenues during the fiscal second quarter, up 15% year over year, demonstrating the operational relevance of reliable power delivery and thermal performance.
As AI chips scale to higher thermal loads, traditional cooling systems face rising obsolescence risks. Corintis' micro-channelled, direct-to-chip cold plates using microfluidic technology allow consistent liquid flow volumes across higher thermal densities. The technology supports up to three times lower temperatures compared to standard cold plates. For APLD, this may extend cooling system lifecycles as hyperscalers upgrade hardware, reducing reinvestment needs while improving flexibility across chip generations.
The Babcock & Wilcox engagement focuses on accelerating energy delivery timelines. In November 2025, Babcock signed a limited notice to proceed for a project valued over $1.5 billion to deliver 1 GW of power using four 300 MW natural gas-fired power plants, targeted to begin operations in 2028. For APLD, dedicated power generation reduces dependence on constrained utility connections and may accelerate lease commencements as hyperscalers prioritize guaranteed power availability.
However, execution risk rises as these initiatives scale. Corintis must prove commercial viability, while power solutions depend on utility and regulatory alignment. This comes as Applied Digital advances 600 megawatts of contracted capacity. The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $67.68 million, up 27.89% year over year, leaving upside tied to whether power availability and scalable cooling enable earlier energization, higher effective utilization and smoother conversion of contracted capacity into recognised hosting revenue.
APLD Faces Stiff Competition
Applied Digital faces competition in the power and cooling ecosystem from Vertiv (VRT - Free Report) and nVent Electric (NVT - Free Report) , both leveraged to rising AI-driven power density across hyperscale and enterprise data centers.
Vertiv benefits from higher rack densities through integrated power delivery and liquid cooling systems, while nVent Electric supports similar trends via electrical enclosures and power distribution components tied to higher watts per rack. Unlike Vertiv and nVent Electric, Applied Digital embeds power and cooling within owned campuses, using infrastructure control to support earlier energisation and more reliable conversion of contracted capacity into hosting revenue.
APLD’s Share Price Performance, Valuation & Estimates
Applied Digital shares have skyrocketed 301.3% in the past six months, outperforming the broader Zacks Finance sector’s return of 8.5% and the Zacks Financial-Miscellaneous Services industry’s decline of 15.4%.
APLD Stock’s Performance
Image Source: Zacks Investment Research
Applied Digital stock is overvalued, with a forward 12-month price/sales of 24.36X compared with the broader sector’s 3.02X. APLD has a Value Score of F.
APLD’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for third-quarter fiscal 2026 loss is pegged at 9 cents per share, widening by 2 cents over the past 30 days. Applied Digital reported a loss of 16 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.