Can Applied Digital's Polaris Forge2 Drive the Next Leg of Growth?

Applied Digital APLD is advancing its strategic expansion with Polaris Forge 2, a second large-scale N.D. campus aimed at capturing the accelerating demand for AI-focused data center infrastructure. The project is launching with an initial 300 megawatts of IT load and is designed with a clear pathway to scale toward 1 gigawatt as additional power resources become available on the regional grid. Building on the momentum of Polaris Forge 1, which secured full lease commitments at 400 megawatts and approximately $11 billion in long-term contracted revenues, the second campus reinforces Applied Digital’s ability to replicate its development model in a market characterised by strong hyperscale demand. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $280.9 million, up 30.39% year over year, reflecting expectations around incremental capacity coming closer to commercial deployment.

Polaris Forge 2 is entering development during a favorable industry cycle in which demand for liquid-cooled, high-density AI infrastructure continues to exceed available supply. Power-ready sites supported by proven construction execution remain limited across the sector, creating a competitive advantage for developers capable of delivering large-scale capacity on defined timelines while meeting advanced technical requirements. The campus is purpose-built to address these constraints, aligning Applied Digital with hyperscalers seeking sizable AI deployments.

With initial funding secured through Macquarie Equipment Capital, Polaris Forge 2 is positioned to extend the revenue framework established at the Ellendale campus. Its ability to scale toward a full gigawatt and its alignment with customer requirements for purpose-built AI infrastructure suggest the project could play a central role in supporting Applied Digital’s next phase of growth as it advances toward commercial operation.

APLD Faces Stiff Competition

Applied Digital operates in a market where both emerging and established providers are expanding capacity to support AI workloads. Among its peers, Riot Platforms RIOT is moving beyond its crypto-focused base. With its planned high-performance computing facilities, Riot Platforms aims to exceed one gigawatt of future capacity as demand evolves. Equinix EQIX also remains one of the sector’s largest operators, with Equinix running a global network of more than 260 data centers and expanding its xScale portfolio for hyperscale customers requiring power-dense environments. While Riot Platforms and Equinix benefit from broader scale and mature customer ecosystems, APLD’s focus on purpose-built, liquid-cooled infrastructure and its rapid development approach at sites like Polaris Forge 2 offers a differentiated path.

APLD’s Share Price Performance, Valuation & Estimates

Applied Digital shares have skyrocketed 182.1% in the past six months, outperforming the broader Zacks Finance sector’s return of 10.1% and the Zacks Financial-Miscellaneous Services industry’s decline of 4.2%.

APLD Stock’s Performance

Applied Digital stock is overvalued, with a forward 12-month price/sales of 18.24X compared with the broader sector’s 9.08X. APLD has a Value Score of F.

APLD’s 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 previous year.

Applied Digital Corporation Price and Consensus

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

APLD currently carries a Zacks Rank #2 (Buy). 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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