Applied Digital (US:APLD) ZACKS·2025-11-18 19:16Core Insights - Applied Digital (APLD) is positioning itself as a critical infrastructure provider for the AI revolution, focusing on purpose-built data centers for high-performance computing workloads [1] - The company’s proprietary liquid cooling system enhances energy efficiency and sustainability, addressing key constraints for hyperscalers [2] - APLD's expansion plans, including a 400 MW capacity at Polaris Forge 1, indicate strong market demand for specialized AI infrastructure [3][4] Infrastructure and Market Demand - The active pipeline of 4 gigawatts and discussions with hyperscalers suggest robust demand for AI-specific capacity [4] - APLD achieved a significant operational milestone with the first 50-MW phase at Polaris Forge 1, transitioning from construction to revenue generation [4] Financial Performance and Growth Projections - The Zacks Consensus Estimate for fiscal second-quarter revenues is $75.95 million, reflecting an 18.91% year-over-year increase [5] - APLD's aggressive capital deployment across multiple projects may introduce execution complexities, impacting revenue growth sustainability [5] Competitive Landscape - APLD faces competition from Riot Platforms and Equinix, both of which are expanding their capabilities in AI infrastructure [6] - Riot Platforms operates large power-dense sites and shares regional advantages with APLD, while Equinix leverages its extensive global network of data centers [6] Stock Performance and Valuation - APLD shares have increased by 200.2% year to date, significantly outperforming the broader Zacks Finance sector [7] - The stock is considered overvalued with a forward price/sales ratio of 16.2X compared to the sector's 8.93X [10] - The Zacks Consensus Estimate for the second-quarter fiscal 2026 loss is 10 cents per share, indicating a wider loss compared to the previous year [12]