Applied Digital Reignites Momentum After a Blowout Quarter

Core Viewpoint - Applied Digital (NASDAQ: APLD) is positioned to capitalize on the growing demand for AI infrastructure and GPU-as-a-Service, with a strong outlook following its fiscal Q2 2026 earnings report [2][4]. Group 1: Financial Performance - Applied Digital reported a significant revenue increase of 250% year-over-year, reaching $126.6 million in net revenue, which exceeded market expectations by 5,500 basis points [4]. - The company achieved a 76% reduction in net losses despite increased investments, with adjusted EBITDA at $20.2 million and slightly positive adjusted net income [5]. - The adjusted earnings per share (EPS) of $0.00 was more than 20 cents better than anticipated, indicating a strong performance relative to expectations [5]. Group 2: Market Dynamics - Short interest in Applied Digital surged to record highs near 50% in late 2025, creating a setup for a potential short-covering rally at the start of 2026 [4]. - The positive earnings report has led to renewed investor confidence and accumulation of the stock by analysts and institutions, putting pressure on short-sellers [3][4]. - The stock's rebound following the fiscal Q2 results suggests potential for reaching new market highs [3].