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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 Q1 2026 Earnings: A Strong Start to the Year

Applied Digital reported revenues of $64.2 million for the first quarter of 2026, representing an 84% increase from $34.8 million in the same period last year. The growth was primarily driven by $26.3 million of revenue generated from tenant fit-out services associated with its HPC hosting business. The company's EPS came in at -$0.11, in line with analyst estimates. With a net operating income anchored by long-term contracts with hyperscale tenants, the company is poised for significant growth.

Publication Date: Oct -28

📋 Highlights
  • CoreWeave Lease Expansion:: Total contract value increased to $11 billion, securing long-term revenue from a publicly traded AI hyperscaler.
  • Polaris Forge Two Development:: 300 MW critical IT load campus with projected PUE of 1.18, aiming for 2027 full online capability.
  • Revenue Growth:: Q1 2026 revenue rose 84% to $64.2 million, driven by $26.3 million from tenant fit-out services.
  • Macquarie Capital Deal:: $5 billion financing unlocks $20–$25 billion capital, enabling rapid expansion without additional capital raises.
  • NOI Growth Target:: Aiming for $1 billion net operating income run rate within five years, supported by CoreWeave ($500M annual NOI) and Polaris Forge Two expansion.

Financial Performance

The company's financial performance was bolstered by its expanding HPC data center hosting segment. Applied Digital ended the quarter with $114.1 million in cash, cash equivalents, and restricted cash, alongside $687.3 million in debt. As Wes Cummins, part of the management team, mentioned, "We're laying the foundation to reach our stated goal of $1 billion of NOI run rate within five years." This suggests that the company is on track to achieve its ambitious growth targets.

Valuation Metrics

To understand what's priced into Applied Digital's stock, we can look at its valuation metrics. The stock trades at a P/S Ratio of 43.86, EV/EBITDA of -67.55, and a P/B Ratio of 8.42. These metrics indicate that the market is pricing in significant growth expectations. With analysts estimating revenue growth of 40.2% next year, it's clear that the market is expecting continued expansion.

Operational Highlights

Operationally, Applied Digital made significant progress in the quarter, breaking ground on a new campus, Polaris Forge Two, near Harwood, North Dakota. The company is also in advanced discussions with an investment-grade hyperscaler regarding a lease for this campus. With a robust multi-gigawatt pipeline growing, Applied Digital is well-positioned to capitalize on the increasing demand for data centers capable of supporting AI and HPC workloads.

Financing and Capital Structure

The company's CFO, Saidal Mohmand, provided insight into the project financing for the Ellendale 400-megawatt project, expecting the loan-to-cost to be around 70%, with a spread over SOFR of 400-450 basis points. Additionally, the company has secured a $5 billion Macquarie Capital financing deal, which unlocks $20-$25 billion of total capital. This financing will enable Applied Digital to build significant capacity and eliminate the need for constant capital raisings.

3. NewsRoom

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A.I. "All Up from Here:" Why Dale Smothers Says "Get into These Names Now"

Dec -02

Source: youtube.com

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Applied Digital Leads $25 Million Funding Round for Corintis to Advance Innovation in Data Center Technology

Dec -02

Source: globenewswire.com

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Prediction: Applied Digital Could Soar 133% After Its Latest Milestone

Dec -02

Source: fool.com

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Think It's Too Late to Buy Applied Digital Stock? Here's the 1 Reason Why There's Still Time.

Dec -01

Source: fool.com

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Ensign Peak Advisors Inc Has $611,000 Stock Holdings in Applied Digital Corporation $APLD

Dec -01

Source: defenseworld.net

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History Says the Nasdaq Will Soar in 2026: The Best Stocks to Buy With $250 Before It Does

Nov -30

Source: fool.com

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Power On: Applied Digital's First AI Data Center Goes Live

Nov -28

Source: marketbeat.com

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3 Stocks to Buy for the Evolution of AI Infrastructure

Nov -28

Source: marketbeat.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

1-Year Total Return ->

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Greenidge Generation Holdings

A-Score: 3.9/10

Value: 9.8

Growth: 4.0

Quality: 5.9

Yield: 0.0

Momentum: 3.5

Volatility: 0.3

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Bitcoin Depot

A-Score: 3.9/10

Value: 6.3

Growth: 2.1

Quality: 3.9

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

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Applied Digital

A-Score: 3.8/10

Value: 6.2

Growth: 3.4

Quality: 3.6

Yield: 0.0

Momentum: 9.5

Volatility: 0.3

1-Year Total Return ->

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Bit Digital

A-Score: 3.8/10

Value: 7.4

Growth: 6.4

Quality: 3.5

Yield: 0.0

Momentum: 5.0

Volatility: 0.7

1-Year Total Return ->

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Stronghold Digital Mining

A-Score: 2.7/10

Value: 8.4

Growth: 2.8

Quality: 1.8

Yield: 0.0

Momentum: 2.0

Volatility: 1.3

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

31.22$

Current Price

31.22$

Potential

-0.00%

Expected Cash-Flows