Core Insights - Applied Digital's Polaris Forge 2 development signifies the company's expansion into AI-focused data center infrastructure, starting with an initial 300 megawatts of IT load and potential scaling to a full gigawatt as power becomes available [1][2] - The success of Polaris Forge 1, which is fully leased at 400 megawatts and has approximately $11 billion in long-term contracted revenues, sets a precedent for the second campus [1] - The Zacks Consensus Estimate for fiscal 2026 revenues is projected at $280.9 million, indicating potential growth as new capacity is deployed [1] Development Context - Polaris Forge 2 is being developed amid rising demand for liquid-cooled, high-density AI infrastructure, with limited power-ready sites available [2] - The project is designed to meet customer needs for clear construction schedules and advanced cooling capabilities as demand trends into 2026 and 2027 [2] Broader Infrastructure Factors - Applied Digital has 700 megawatts under construction and a 4-gigawatt active development pipeline, which may influence the pace of Polaris Forge 2's development [3] - Factors such as labor availability, material lead times, financing costs, and shifts in regional power markets could impact scheduling and spending for the project [3] Competitive Landscape - Applied Digital faces competition from both emerging and established providers, such as Riot Platforms and Equinix, who are also expanding their capacities for AI workloads [4] - Riot Platforms aims to exceed one gigawatt of future capacity, while Equinix operates over 260 data centers globally, focusing on power-dense environments [4] - APLD differentiates itself through its focus on purpose-built, liquid-cooled infrastructure and rapid development at sites like Polaris Forge 2 [4] Stock Performance and Valuation - Applied Digital's stock has increased by 179.7% year to date, significantly outperforming the broader Zacks Finance sector and the Zacks Financial-Miscellaneous Services industry, both of which returned 11.2% [5] - The company's stock is considered overvalued, with a forward 12-month price/sales ratio of 15.01X compared to the sector's 8.93X, resulting in a Value Score of F [9] - The Zacks Consensus Estimate for fiscal 2026 loss is projected at 31 cents per share, a narrowing of six cents over the past 30 days, compared to a loss of 80 cents per share in the previous year [11]

Core Insights - Applied Digital (APLD) and IREN Limited (IREN) are focusing on next-generation data center infrastructure for high-performance computing (HPC) and artificial intelligence (AI) workloads, addressing the growing demand for scalable computing solutions [1][2] - The global AI market is projected to reach $500 billion by 2027, driven by increased adoption across various sectors such as healthcare, finance, transportation, and manufacturing, which is favorable for both companies [1] Applied Digital (APLD) Highlights - APLD's HPC Hosting business is designed to support high-power density applications, with the Polaris Forge 1 facility set to scale up to 1 gigawatt (GW), with the first 100-MW facility operational by Q4 2025 [3] - APLD has secured a 15-year lease agreement with CoreWeave for 400 MW of critical IT load at Polaris Forge 1, with anticipated lease revenues of approximately $11 billion, indicating a strategic shift from cryptocurrency mining to AI-focused infrastructure [4] - The Zacks Consensus Estimate for APLD's fiscal 2026 revenues is $280.9 million, reflecting a growth of 30.4% from fiscal 2025 [5] - APLD's fiscal 2026 loss is estimated at 31 cents per share, an improvement from the previous estimate of 34 cents [11] IREN Limited Highlights - IREN is on track to achieve $1.25 billion in annualized revenues, with $200-$250 million expected from AI Cloud by December 2025, and plans to scale GPU installations significantly [6][7] - IREN has installed over 60,000 NVIDIA Blackwell GPUs and is transitioning from bitcoin mining to AI, with a new liquid-cooled data center planned [7] - IREN anticipates $500 million in AI Cloud annualized run-rate revenue by Q1 fiscal 2026 [7] - The Zacks Consensus Estimate for IREN's fiscal 2026 earnings is 70 cents per share, down 39.1% over the past 60 days [10] Stock Performance and Valuation - APLD shares have surged 49.7% in the past month, outperforming IREN's 33% gain, indicating stronger investor momentum for APLD [8][11] - Both APLD and IREN are considered overvalued, as indicated by a Value Score of F [14] Conclusion - APLD is expected to benefit from the CoreWeave partnership and the increasing demand for AI infrastructure, while IREN's growth is tempered by bitcoin price volatility and modest revenue growth prospects [15]

Core Insights - Applied Digital (APLD) shares have appreciated 46.8% in a month, outperforming the broader Zacks Finance sector's decline of 2.9% and the Zacks Financial – Miscellaneous Services industry's fall of 8.1% [1] - Year to date (YTD), APLD shares have returned 369.9%, significantly outperforming close peers like Riot Platforms (115.5% return) and Equinix (-12.5% return) [2] Company Performance - APLD's strong performance is attributed to robust demand for data center infrastructure and a growing focus on energy efficiency [6] - The company expects hyperscaler spending to exceed $350 billion in 2025, which bodes well for its prospects [6] - APLD shares are currently trading above the 50-day and 200-day moving averages, indicating a bullish trend [7] Business Developments - APLD's Data Center Hosting business provides energized infrastructure services to crypto mining customers, with a total hosting capacity of approximately 286 megawatts (MWs) [12] - The HPC Hosting business is expected to drive long-term top-line growth, with the Polaris Forge 1 facility designed to scale up to 1 gigawatt (GW) [13] - APLD has signed three lease agreements with CoreWeave to deliver 400 MW of critical IT load at Polaris Forge 1, with anticipated lease revenues of roughly $11 billion [14] Financial Outlook - The Zacks Consensus Estimate for APLD's fiscal 2026 loss is currently pegged at 36 cents per share, which has widened over the past 30 days [15] - The consensus mark for APLD's second-quarter fiscal 2026 loss is currently pegged at 11 cents per share, also widening over the past month [16] Valuation Concerns - APLD stock is currently considered overvalued, with a forward 12-month price/sales ratio of 27.32X compared to the industry's 3.72X [17] - The stock's valuation is stretched, which raises concerns for potential investors [20]

Core Insights - Applied Digital (APLD) shares are currently overvalued with a Value Score of F, trading at a forward 12-month Price/Sales (P/S) ratio of 13.5X compared to the industry average of 3.5X [1] - APLD's stock has increased by 109% year-to-date, significantly outperforming the industry return of 5.6% and the Zacks Finance sector's 12.5% appreciation [3] - The company has secured $11 billion in contracted revenue through a 15-year AI infrastructure deal with CoreWeave, indicating strong demand for its services [6][9] Financial Performance - Fiscal Q4 revenue rose 41% year-over-year to $38 million, driven by increased data center capacity and strong AI demand [6][11] - Fiscal 2025 revenues reached $144.2 million, a 6% increase from the previous year, with CoreWeave agreements underpinning sustained demand growth [11] - Adjusted EBITDA for Q4 of fiscal 2025 was $1 million, reflecting improved operational efficiency compared to a loss of $0.2 million in the prior year [16] Strategic Developments - The partnership with CoreWeave has validated APLD's strategic shift from cryptocurrency mining to AI-optimized data center infrastructure, providing unprecedented revenue visibility [10] - APLD is expanding its data center footprint with purpose-built facilities for AI workloads, including the Polaris Forge 1 campus designed to scale to 1 gigawatt [14][15] - The upcoming Polaris Forge 2 project, a $3 billion AI factory, is set to break ground in September 2025, further enhancing APLD's capabilities in the AI infrastructure sector [17] Market Position - APLD's stock is trading above the 50-day and 200-day moving averages, indicating a bullish trend [7] - The company is positioned to compete effectively in the rapidly growing AI infrastructure sector due to its strategic location in North Dakota, which offers low-cost energy and efficient cooling solutions [15] - APLD's premium valuation is supported by its transformational partnership with CoreWeave and the accelerating buildout of AI-focused infrastructure [19]

Core Growth Driver - Applied Digital's hyperscale hosting business is the main growth driver, fueled by increasing AI infrastructure demand and commitments from leading hyperscalers [1][2] - The company plans to start construction on Polaris Forge 2, a $3 billion, 280-megawatt AI Factory in September 2025, with initial operations expected in 2026 and full capacity by early 2027 [1][8] Revenue and Financial Performance - In Q4 of fiscal 2025, Applied Digital reported revenues of $38 million, a 41% increase year-over-year, driven by strong capacity additions [3] - Polaris Forge 1 has secured long-term leases with CoreWeave, covering 400 MW and approximately $11 billion in contracted revenues, setting a strong foundation for Polaris Forge 2 [2][8] Competitive Landscape - Applied Digital faces competition from established data center operators like Equinix and Digital Realty Trust, which have significant scale and diversified customer bases [4][5] - Equinix operates over 260 data centers globally, providing a strong interconnection platform, while Digital Realty Trust focuses on hyperscale developments across multiple regions [4][5] Share Price and Valuation - Applied Digital's shares have appreciated 106.4% year-to-date, significantly outperforming the broader Zacks Finance sector and the Zacks Financial - Miscellaneous Services industry [6] - The company is trading at a forward 12-month Price/Sales ratio of 13.4X, compared to the industry's 3.36X, indicating a premium valuation [10] Earnings Estimates - The Zacks Consensus Estimate for Applied Digital's first quarter fiscal 2026 loss is 6 cents per share, reflecting a decline from the previous year's loss of 3 cents per share [13] - The consensus for fiscal 2026 loss is pegged at 21 cents per share, suggesting a 73.75% year-over-year improvement [13]

Core Viewpoint - Investors are primarily attracted to Applied Digital Corporation for its significant revenue growth rather than its current profitability [5]. Group 1: New Data Center Announcement - Applied Digital announced the construction of a new data center named "Polaris Forge 2," which is a $3 billion investment in North Dakota [3]. - The new data center is designed to operate at 280 megawatts of power to meet the increasing demand for AI computing [3]. - Construction is set to begin in September, with the facility expected to open in 2026 and reach full capacity by early 2027 [3]. Group 2: Business Prospects - The company has reported strong interest from multiple parties, including at least one U.S.-based investment-grade hyperscaler, to lease capacity at the new data center [4]. - Applied Digital has secured power through Cass County Electric Cooperative, ensuring operational readiness for the new facility [4]. Group 3: Financial Performance - Revenue for Applied Digital more than doubled last year and has increased by 1500% over the past two years [5]. - Despite the impressive revenue growth, the company is currently not profitable, with analysts predicting it will not achieve profitability before 2028 [5].

Core Viewpoint - Applied Digital Corporation is set to expand its AI infrastructure with the construction of Polaris Forge 2, a $3 billion, 280MW AI Factory in Harwood, North Dakota, aimed at meeting the increasing demand for AI computing capacity [3][4][5]. Company Overview - Applied Digital Corporation (Nasdaq: APLD) specializes in designing, building, and operating high-performance data centers for AI, cloud, networking, and blockchain workloads [10]. - The company has been recognized as the Best Data Center in the Americas 2025 by Datacloud [10]. Project Details - Polaris Forge 2 will have an initial capacity of 280MW, with plans to scale beyond this capacity, and is scheduled to begin operations in 2026, reaching full capacity in early 2027 [3][4]. - The project will cover more than 900 acres and is expected to employ over 200 full-time employees once fully operational [5]. Market Demand - There is a surging demand for AI computing capacity from hyperscalers, enterprises, and research organizations, necessitating scalable and high-performance infrastructure [4][5]. - North Dakota is becoming a strategic location for AI infrastructure due to its abundant energy resources, available land, and pro-business climate [4][9]. Community Impact - The expansion into Harwood is expected to strengthen local communities and contribute to the economy, with commitments to workforce housing and local partnerships [5][9]. - Local officials, including the Governor and Mayor of Harwood, have expressed support for the project, highlighting its potential to drive technological progress and economic benefits for the region [5][9].

Core Insights - Applied Digital Corporation plans to break ground on Polaris Forge 2, a $3 billion, 280-megawatt AI Factory in North Dakota, with initial capacity expected in 2026 and full capacity by early 2027 [2][3][4] - The project aims to meet the surging demand for AI computing capacity from hyperscalers, enterprises, and research organizations, building on the success of the existing Polaris Forge 1 campus [3][4] - The new facility will occupy over 900 acres and is expected to create more than 200 full-time jobs, contributing to the local economy and community development [4][5][6] Company Developments - Polaris Forge 2 is seen as a strategic move for Applied Digital to enhance its leadership in high-performance AI infrastructure [4][7] - The company has secured power through Cass County Electric Cooperative, ensuring reliable energy supply for the new facility [5][6] - The expansion into Harwood is part of a broader commitment to invest in local communities and create long-term economic opportunities [7][8] Industry Context - North Dakota is emerging as a key destination for AI infrastructure due to its abundant energy resources, available land, and supportive business environment [3][6][8] - The demand for AI capacity is accelerating, indicating a growing market for high-performance computing solutions [3][4] - The project aligns with the trend of technological progress and community investment, positioning North Dakota favorably in the AI infrastructure landscape [6][7]