Core Insights - The data center industry is experiencing a significant transformation driven by the demands of artificial intelligence (AI), which requires unprecedented levels of computing power and resources [1] - Applied Digital is positioning itself as a leader in this sector by constructing high-tech data centers specifically designed for AI applications, anticipating substantial growth in the coming years [2] Company Developments - Applied Digital is currently developing two AI data center campuses, Polaris Forge 1 and Polaris Forge 2, with capacities of 450 megawatts (MW) and 300 MW, respectively, expected to be completed by 2027 [3] - Additionally, the company is constructing Delta Forge 1, which will have an initial capacity of 430 MW and is projected to begin operations by mid-2027 [3] Revenue Projections - The company has secured significant lease agreements, including a deal with CoreWeave worth $11 billion over 15 years and another unnamed AI company for approximately $5 billion over the same period, indicating strong revenue growth potential [4] - Analysts estimate that Applied Digital will generate around $346 million in revenue for fiscal 2026 and $535 million for fiscal 2027, leading to a valuation of 17 to 18 times next year's revenue estimates [7] Market Performance - Applied Digital's stock has surged by 700% over the past 18 months, raising its market capitalization to approximately $9.5 billion [6] - The current stock price is $36.70, reflecting a significant increase from its 52-week low of $3.31 [5][6]

Core Insights - Applied Digital (APLD) is transitioning from development to revenue generation with its AI infrastructure portfolio, particularly with the operational launch of Polaris Forge 1 and ongoing construction of new campuses [2][10] - The hyperscale data center market is experiencing a demand-supply imbalance, with an estimated $350 billion being deployed annually toward AI infrastructure, creating favorable conditions for developers like APLD [3] Company Developments - The Polaris Forge 1 campus has a 400-megawatt CoreWeave lease valued at approximately $11 billion over 15 years, with projections of generating around $500 million in annual net operating income once fully operational [4] - APLD has a 4-gigawatt active development pipeline and is negotiating for two new locations, with a proprietary cooling system that enhances operational efficiency [5] Financial Projections - The Zacks Consensus Estimate for APLD's fiscal 2026 revenues is $280.9 million, indicating a year-over-year growth of 26.99% [5][10] - APLD's stock has increased by 212.6% over the past six months, significantly outperforming the broader Zacks Finance sector [8] Competitive Landscape - APLD faces competition from Riot Platforms and Equinix, with Riot Platforms shifting focus to high-density compute and Equinix leveraging its global scale and established relationships in the hyperscaler market [7] - Equinix is retrofitting existing facilities for AI workloads while expanding capacity, intensifying competitive dynamics for APLD [7] Valuation Metrics - APLD's stock is considered overvalued, with a forward 12-month price/sales ratio of 19.26X compared to the sector's 9.08X, and it holds a Value Score of F [11]

Core Insights - Applied Digital (APLD) announced a strategic spinoff to enhance its position in the AI infrastructure market by merging its cloud computing division with EKSO Bionics Holdings to form ChronoScale Corporation, which will focus on AI workloads [1][3] Company Developments - The transaction structure allows Applied Digital to retain approximately 97% ownership of the new entity, enabling it to spin out its cloud business while maintaining significant control [2] - ChronoScale will serve as a standalone platform for GPU-intensive AI training and inference workloads, allowing both Applied Digital and ChronoScale to pursue independent growth strategies with increased capital flexibility [3] Financial Performance - Applied Digital's market capitalization is currently valued at $6.88 billion, with its stock price having more than tripled in the past year, although it is down nearly 40% from its 52-week high [4] - The company is transitioning from a cryptocurrency mining operation to a key player in the AI infrastructure sector, having secured billions in long-term contracts that provide revenue visibility [5] Infrastructure Development - The flagship data center, Polaris Forge 1, is a 400-megawatt facility leased to CoreWeave under a 15-year agreement valued at approximately $11 billion, with a subsequent $5 billion deal for Polaris Forge 2 with an unnamed investment-grade hyperscaler customer [6] - Applied Digital is constructing data centers in North Dakota, where electricity costs are 24% below the national average, which is advantageous given the high power consumption of AI queries compared to traditional internet searches [7]

Core Insights - Applied Digital (APLD) is expanding its operations with the development of Polaris Forge 2, a large-scale data center campus aimed at meeting the growing demand for AI infrastructure, starting with an initial capacity of 300 megawatts and a potential to scale to 1 gigawatt [2][4] - The company has secured full lease commitments for its first campus, Polaris Forge 1, at 400 megawatts, generating approximately $11 billion in long-term contracted revenues, indicating a strong market position [2][4] - The Zacks Consensus Estimate projects APLD's fiscal 2026 revenues to reach $280.9 million, reflecting a year-over-year increase of 30.39% as the company approaches commercial deployment of additional capacity [2][8] Industry Context - The development of Polaris Forge 2 is timely, as the demand for liquid-cooled, high-density AI infrastructure is currently outpacing supply, providing a competitive edge for developers who can deliver large-scale capacity efficiently [3] - APLD's focus on purpose-built infrastructure aligns with the needs of hyperscalers, positioning the company favorably against competitors like Riot Platforms and Equinix, which are also expanding their capacities [5] Financial Performance - APLD's stock has experienced a significant increase of 182.1% over the past six months, outperforming the broader Zacks Finance sector, which returned 10.1%, and the Zacks Financial-Miscellaneous Services industry, which declined by 4.2% [6] - The company's forward 12-month price/sales ratio stands at 18.24X, indicating that APLD may be overvalued compared to the broader sector's ratio of 9.08X [10] - The Zacks Consensus Estimate for APLD's fiscal 2026 loss is projected at 31 cents per share, consistent with the previous year's loss of 80 cents per share, while the company holds a Zacks Rank 2 (Buy) [13]

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].