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1. Company Snapshot

1.a. Company Description

Applied Digital Corporation designs, develops, and operates datacenters in North America.Its datacenters provide digital infrastructure solutions to the performance computing industry.The company was formerly known as Applied Blockchain, Inc.


and changed its name to Applied Digital Corporation in November 2022.Applied Digital Corporation was incorporated in 2001 and is based in Dallas, Texas.

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1.b. Last Insights on APLD

Here is a 90-word analysis of the negative drivers behind Applied Digital Corporation's recent stock performance: The company's Q2 earnings release was a major disappointment, with a reported loss of $0.66 per share, missing estimates by a wide margin. The lack of progress in signing a customer for its 100MW data center in Ellendale, despite being over a year in development, raises concerns about management's execution ability. Additionally, the company's stretched valuation remains a concern, and the recent earnings release did little to alleviate these worries.

1.c. Company Highlights

2. Applied Digital's Q2 FY2026 Earnings: A Strong Growth Trajectory

Applied Digital reported a significant revenue increase of 250% to $126.6 million in its fiscal second quarter 2026, driven primarily by $73 million from tenant fit-out services associated with its HPC Hosting Business and $12 million from the commencement of the first CoreWeave lease. The Data Center Hosting segment contributed $41.6 million, a 15% increase compared to the prior year. The company's actual EPS came out at -$0.11, slightly missing estimates of -$0.09.

Publication Date: Jan -11

📋 Highlights
  • Revenue Surge Driven by New Services: Q2 revenue reached $126.6M, up 250% YoY, fueled by $73M in tenant fit-out services and $12M from the CoreWeave lease.
  • Strong Financing and Liquidity Position: Completed $2.35B senior notes and maintains $2.3B in cash versus $2.6B in debt, with $100M in loan facilities and $5B equity facility.
  • Hyperscaler Market Expansion: Secured 600MW under contract with two hyperscalers in a $400B+ annual investment market, with a $16B 2025 deal pipeline.
  • Strategic Campus Advantages: Dakota sites leverage low-cost energy and natural cooling, targeting 1.4GW and 1GW expansion at PF-1 and PF-2, with potential to scale to 2GW+.
  • ChronoScale Spin-Off Potential: Proposed $60–75M growth opportunity from merging cloud business with EKSO Bionics, targeting AI compute markets with $60M+ in cloud assets.

Financial Performance and Liquidity

The substantial revenue growth was accompanied by a significant improvement in the company's financial position, with $2.3 billion in cash, cash equivalents, and restricted cash versus $2.6 billion in debt. Applied Digital completed a $2.35 billion private offering of its 9.25% senior secured notes due 2030, further bolstering its liquidity. The company has agreements in place with top-tier financial institutions, including a $100 million development loan facility and a $5 billion preferred equity facility, of which $900 million has been drawn.

Operational Highlights and Pipeline

Applied Digital is executing in a market characterized by extraordinary hyperscaler investment, now exceeding $400 billion annually. The company has two hyperscalers under contract for 600 megawatts and additional sites in advanced discussions. The Dakota campuses are expected to provide a durable strategic advantage due to their low-cost energy, natural cooling, and supportive regulatory environment. The company has a robust pipeline, with a $16 billion deal pipeline for 2025 and expectations of similar or better performance in 2026.

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 62.8%. The company's current valuation metrics, including a P/S Ratio of 37.33 and an EV/EBITDA of -228.7, suggest that the market is pricing in significant growth expectations. With a potential growth opportunity of $60-75 million from its cloud business, ChronoScale, and a focus on scaling and executing projects across multiple sites, Applied Digital is poised for continued growth.

Technological Advancements

The company's Corintis technology, with its cold plate solution, is being designed to integrate into semiconductor packaging and the manufacturing process, offering efficiency and scalability in chip cooling. This technology is expected to benefit customers by providing efficiency and scalability, helping to future-proof their infrastructure as power demands increase.

3. NewsRoom

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Clear Creek Financial Management LLC Trims Stock Position in Applied Digital Corporation $APLD

Feb -21

Source: defenseworld.net

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2 Monster Stocks to Hold for the Next 5 Years

Feb -21

Source: fool.com

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Better Data Center Stock: Applied Digital vs. Riot Platforms

Feb -21

Source: fool.com

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Neocloud Contagion: CoreWeave Financing Woes Drag Down Nebius, Applied Digital

Feb -20

Source: benzinga.com

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AI Spending Is Poised to Hit $700 Billion in 2026. 2 Top Stocks to Buy to Capitalize on This Massive Number.

Feb -20

Source: fool.com

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Comparing Applied Digital (NASDAQ:APLD) and Resolute Holdings Management (NYSE:RHLD)

Feb -20

Source: defenseworld.net

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APLD vs. VRT: Which Data Center Infrastructure Stock is a Better Buy?

Feb -18

Source: zacks.com

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Applied Digital, Recursion Pharmaceuticals Stocks Drop. Blame Nvidia.

Feb -18

Source: barrons.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (25.33%)

6. Segments

Blockchain Digital Infrastructure

Expected Growth: 25.33%

The 25.33% growth of Blockchain Digital Infrastructure from Applied Digital Corporation is driven by increasing adoption of blockchain technology, rising demand for secure and efficient data storage, growing need for decentralized networks, and expanding use cases in industries such as finance, supply chain, and healthcare.

7. Detailed Products

Digital Infrastructure

Applied Digital Corporation's digital infrastructure provides a robust and scalable foundation for businesses to build and deploy their digital strategies.

Artificial Intelligence and Machine Learning

Applied Digital's AI and ML solutions enable businesses to automate processes, gain insights, and make data-driven decisions.

Cybersecurity Services

Applied Digital's cybersecurity services provide comprehensive protection against cyber threats, ensuring the integrity of business operations and data.

Cloud and Hybrid IT

Applied Digital's cloud and hybrid IT solutions enable businesses to optimize their IT infrastructure, reduce costs, and improve agility.

Data Analytics and Insights

Applied Digital's data analytics and insights solutions help businesses gain actionable insights, improve decision-making, and drive business outcomes.

Digital Transformation Consulting

Applied Digital's digital transformation consulting services help businesses develop and implement digital strategies that drive business outcomes.

8. Applied Digital Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Applied Digital Corporation faces moderate threat from substitutes due to the presence of alternative digital solutions.

Bargaining Power Of Customers

Customers have significant bargaining power due to the availability of multiple digital service providers, leading to high competition.

Bargaining Power Of Suppliers

Suppliers have limited bargaining power due to the company's strong market position and ability to negotiate favorable terms.

Threat Of New Entrants

The threat of new entrants is moderate due to the presence of barriers to entry, such as high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The digital services market is highly competitive, with multiple players vying for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.67%
Debt Cost 3.95%
Equity Weight 39.33%
Equity Cost 24.76%
WACC 12.13%
Leverage 154.26%

11. Quality Control: Applied Digital Corporation passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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TeraWulf

A-Score: 4.7/10

Value: 6.0

Growth: 4.3

Quality: 3.5

Yield: 5.0

Momentum: 9.0

Volatility: 0.3

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Bit Digital

A-Score: 4.4/10

Value: 7.6

Growth: 6.4

Quality: 9.4

Yield: 0.0

Momentum: 2.5

Volatility: 0.7

1-Year Total Return ->

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Applied Digital

A-Score: 3.8/10

Value: 6.2

Growth: 3.4

Quality: 3.8

Yield: 0.0

Momentum: 9.0

Volatility: 0.3

1-Year Total Return ->

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Greenidge Generation Holdings

A-Score: 3.6/10

Value: 8.8

Growth: 4.0

Quality: 6.1

Yield: 0.0

Momentum: 2.5

Volatility: 0.3

1-Year Total Return ->

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Bitcoin Depot

A-Score: 3.4/10

Value: 8.2

Growth: 2.0

Quality: 4.4

Yield: 0.0

Momentum: 5.0

Volatility: 0.7

1-Year Total Return ->

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Stronghold Digital Mining

A-Score: 2.9/10

Value: 8.1

Growth: 2.8

Quality: 1.8

Yield: 0.0

Momentum: 2.5

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.04$

Current Price

29.04$

Potential

-0.00%

Expected Cash-Flows