Will APLD's AI Infrastructure Push Set Up Long-Term Revenue Growth?

Applied Digital Corporation APLD positions itself at the intersection of surging artificial intelligence infrastructure demand and practical execution capability. The company’s expansion into hyperscale data centre development represents a strategic pivot from its cryptocurrency hosting origins, aligning with a $350 billion annual investment wave that hyperscalers are expected to direct toward AI infrastructure.

APLD’s strategy leans on technical differentiation. Its direct-to-chip, closed-loop liquid cooling system targets a projected power usage effectiveness of 1.18 with near-zero water consumption — an advantage that is likely to gain importance as hyperscalers prioritise efficiency and sustainability. Combined with North Dakota’s naturally favourable climate, these designs are positioned to support lower lifetime operating costs for AI training and inference workloads.

The company’s execution roadmap is beginning to materialise. Polaris Forge 1 has reached 400 megawatts of fully contracted capacity, representing roughly $11 billion in long-term lease value. The first 50-megawatt phase achieved Ready for Service status in October 2025, marking APLD’s initial step toward recurring AI-focused revenues. With construction underway at Polaris Forge 2 and a four-gigawatt active development pipeline, demand for AI-optimised capacity appears to remain strong as hyperscalers broaden their infrastructure footprint.

However, APLD’s ability to convert this momentum into sustained revenue growth will depend on the timing and efficiency of its ramp. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $280.9 million, indicating a 26.99% year-over-year increase and suggesting that new capacity is expected to contribute more meaningfully over the coming periods. As multiple projects advance in parallel, the pace at which these sites transition from construction to active leases will shape the path forward. Whether APLD’s AI infrastructure push fuels the next leg of revenue growth ultimately hinges on its execution as demand for AI-ready capacity accelerates.

APLD Faces Stiff Competition

APLD faces growing competition from Riot Platforms RIOT and Equinix EQIX as demand for AI-ready infrastructure accelerates. Riot Platforms is pursuing a similar shift from blockchain hosting to high-density compute, using its large Texas campuses to target the same AI workloads, and RIOT is expected to deepen this overlap as it expands. Equinix, meanwhile, brings global scale, long-standing hyperscaler relationships and the ability to retrofit facilities for AI needs, with Equinix increasingly positioning its network for higher-density deployments. Together, Riot Platforms and Equinix heighten the competitive backdrop as APLD advances its AI-focused build-out.

APLD’s Share Price Performance, Valuation & Estimates

Applied Digital shares have skyrocketed 191.8% year to date, outperforming the broader Zacks Finance sector’s growth of 10.4% and the Zacks Financial-Miscellaneous Services industry’s decline of 12.9%.

APLD Stock’s Performance

Applied Digital stock is overvalued, with a forward 12-month price/sales of 20.9X compared with the broader sector’s 8.9X and a Value Score of F.

APLD Valuation

The Zacks Consensus Estimate for fiscal 2026 loss is pegged at 31 cents per share, unchanged over the past 30 days. Applied Digital reported a loss of 80 cents per share in the year-ago period.

Applied Digital Corporation Price and Consensus

Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote

Applied Digital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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