Applied Digital Positions for Scale Amid Surging AI Infrastructure Demand

Applied Digital (NASDAQ: APLD) is aggressively expanding its role in the U.S. AI infrastructure ecosystem, focusing on the design and operation of high-performance data centers for hyperscalers and neocloud providers. The company utilizes a hybrid revenue model, generating income from initial custom build-outs and long-term rental agreements for power, space, and infrastructure. A key driver of this growth is the company's partnership with CoreWeave (NASDAQ: CRWV), which currently utilizes the 100-megawatt Polaris Forge 1 facility in North Dakota. Financial results for the third quarter of fiscal 2026 underscore this momentum, with revenue increasing 139% year-over-year to $126.6 million. The company also achieved a non-GAAP profit of $0.09 per share, reversing a loss from the same period last year. Looking forward, Applied Digital has secured $16 billion in contracted lease revenue over a 15-year period from CoreWeave and another hyperscaler. The company expects to operate 250 MW of capacity in the coming year, with a long-term goal of reaching 600 MW. Furthermore, construction has begun on a 300 MW AI factory campus slated for operation by mid-2027. While the stock has faced recent pressure, declining 27% from its January 28 peak, the underlying fundamentals remain tied to the broader AI expansion. This is further supported by CoreWeave's own growth, including a $21 billion contract to provide computing capacity to Meta Platforms and a strategic deal with Anthropic.