Applied Digital Corp. (NASDAQ:APLD) is scaling its AI ambitions, breaking ground on a massive new AI Factory campus in the southern U.S. as strong earnings momentum fuels its push into hyperscale infrastructure.
The company has started construction on Delta Forge 1, a new AI Factory campus in a strategically located southern U.S. market, as the company expands its footprint in high-performance data center infrastructure for artificial intelligence, cloud, networking, and blockchain workloads.
Delta Forge 1 can deliver an initial 430 megawatts of total utility power, supporting up to 300 megawatts of critical IT load, with significant expansion potential beginning in 2028.
The campus converts large-scale power availability into live, high-density AI capacity for hyperscale customers. It is purpose-built to meet the demanding power integration, advanced cooling, and operational requirements of large AI workloads.
The first phase of the project includes two 150-megawatt facilities spread across more than 500 acres.
Once fully operational, the campus is expected to support more than 200 full-time employees, along with long-term contractors, creating sustained economic activity and long-term regional investment.
Repeatable AI Factory Model Targets Hyperscale Demand
As AI adoption accelerates, Applied Digital sees the primary constraint shifting to how quickly and reliably it can convert power into usable AI capacity at scale.
The company aims to address this challenge by developing AI factories that follow a repeatable execution model across multiple campuses.
Applied Digital is advancing Delta Forge 1 while holding discussions with an additional prospective investment-grade hyperscale customer, reflecting strong demand for purpose-built infrastructure capable of supporting high-density AI workloads.
The campus will likely use Applied Digital's proprietary AI Factory blueprint, developed through its Polaris Forge campuses in North Dakota and designed for consistent replication across markets.
The company believes this standardized approach allows it to expand capacity efficiently without compromising performance, reliability, or responsible development.
Initial operations at Delta Forge 1 will likely begin in mid-2027.
Earnings Beat Reinforces Expansion Strategy
Applied Digital's infrastructure expansion follows a strong second-quarter earnings report that exceeded expectations on both earnings and revenue.
The company posted breakeven earnings of zero cents per share, outperforming analyst estimates that had called for a loss.
Revenue surged to $126.6 million, well above Wall Street forecasts and sharply higher from the year-ago period.
Applied Digital drove results primarily through its high-performance computing hosting business, which generated $85 million in quarterly revenue, while its data center hosting segment delivered $41.6 million, up 15% year over year.
Management said demand from hyperscale customers continues to build, supported by the company's early positioning in energy-rich regions such as the Dakotas and its ability to execute complex data center projects.
The company added that it has already secured two hyperscalers in the region and is engaged in advanced talks with another investment-grade hyperscaler across multiple U.S. markets.
The stock gained 268% in the last 12 months, driven by its growth pipeline, a substantial order backlog, and demand for its AI infrastructure.
APLD Price Action: Applied Digital shares were down 2.68% at $34.11 at the time of publication on Thursday, according to Benzinga Pro data.
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