Up 375%, Should You Buy Applied Digital Right Now?

Core Insights - Applied Digital is gaining investor attention for its role in building and operating AI data centers, providing essential cloud infrastructure for leading AI companies, and has a partnership with Nvidia for GPU access [1][2][5] - The company's share price has increased by 375% over the past 12 months due to surging demand for AI data center capacity [2] - Despite impressive sales growth, the company faces significant challenges, including rising expenses and ongoing losses [2][8] Financial Performance - In fiscal Q2 2026, Applied Digital's sales surged by 250% to nearly $127 million, while total expenses rose by 230% to nearly $158 million [6][9] - The company has signed multiyear leasing agreements, such as with CoreWeave, which could generate up to $16 billion in revenue over 15 years [6] - The company reported a non-GAAP diluted loss of $0.07 per share, indicating ongoing profitability challenges despite the booming AI market [10] Market Outlook - The demand for AI infrastructure is expected to continue growing, with Nvidia forecasting that AI infrastructure spending could reach between $3 trillion and $4 trillion over the next five years [7] - Applied Digital is betting on this growth as more tech companies invest in AI processing power [7]