Key Stats for Applied Digital Stock
- Price Change for Applied Digital stock: 15%
- $APLD Share Price as of Jan. 7: $29.6
- 52-Week High: $40
- $APLD Share Price Target: $43
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What Happened?
Appled Digital (APLD) stock is up 15% in early market trading after the data center operator reported fiscal second-quarter results that crushed Wall Street expectations, driven by explosive growth in its AI infrastructure business.
Applied Digital posted revenue of $126.6 million for the quarter ended November 30, up 250% from the same period last year. The results blew past analyst estimates of roughly $81 million. Adjusted earnings per share came in at breakeven, significantly better than the expected loss of $0.12 per share.
The company’s High-Performance Computing Hosting Business drove most of the growth, generating $85 million in quarterly revenue. This included $73 million from tenant fit-out services and $12 million from rental revenue as its first building at Polaris Forge 1 became fully operational during the quarter.
Applied Digital’s Data Center Hosting Business added another $41.6 million, up 15% year over year. This segment operates 286 megawatts of customer equipment across two North Dakota facilities and generated roughly $16 million in operating profit on an asset base of $131 million.
The company has secured massive long-term contracts that position it for continued growth. It has agreements for 600 megawatts of capacity across two North Dakota campuses, representing approximately $16 billion in prospective lease revenue over 15 years. This includes a $5 billion deal with a U.S. investment-grade hyperscaler for 200 megawatts at Polaris Forge 2.
CEO Wes Cummins said the company is in advanced discussions with another investment-grade hyperscaler for multiple additional sites. Applied Digital ended the quarter with $2.3 billion in cash and recently completed a $2.35 billion senior secured notes offering to finance its expansion.
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What the Market Is Telling Us About APLD Stock
The positive reaction to APLD stock shows investors are excited about the company’s ability to capitalize on surging demand for AI infrastructure.
Hyperscalers are aggressively competing to secure data center capacity to support massive AI workloads, and Applied Digital has positioned itself as a key supplier.
“The Dakotas represent a compelling region for hyperscalers due to their cool climate and abundant energy,” Cummins said on the earnings call. “We believe our first-mover advantage, combined with our proven ability to execute technically complex data center construction, positions Applied Digital with a strong competitive advantage.”
Cummins added that the company expects to surpass its long-term goal of $1 billion in net operating income within five years, faster than previously anticipated.
Applied Digital is working on three additional campuses beyond its current two, each capable of scaling to 2 gigawatts.
The company also announced plans to spin off its cloud business and merge it with EKSO Bionics to form ChronoScale, with Applied Digital retaining over 80% ownership. This move is designed to allow each business to scale independently while enhancing long-term shareholder value.
With hyperscaler investment in AI infrastructure now exceeding $400 billion annually, APLD stock appears well positioned to benefit from continued strong demand for large-scale data centers.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
