Applied Digital Shares Rise 4% After Q1 Revenue Beat and Expansion of AI Data Centre Capacity

Applied Digital Corporation (NASDAQ:APLD) shares gained 4% in pre-market trading on Thursday after the data centre operator reported first-quarter fiscal 2027 results that exceeded analysts’ expectations, supported by strong revenue growth and continued expansion of its artificial intelligence infrastructure.

The company reported adjusted revenue of $300.4 million, substantially above the Wall Street consensus estimate of $111.19 million.

Adjusted earnings also exceeded expectations, with Applied Digital recording a loss of $0.01 per share, compared with analysts’ forecasts for a loss of $0.27 per share.

Total quarterly revenue increased 322% year on year to $341.9 million, up from $80.9 million in the corresponding period of fiscal 2026.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) reached $64.4 million, compared with $0.5 million a year earlier, reflecting the expansion of the company’s high-performance computing (HPC) hosting operations.

The revenue increase was supported by $183.5 million generated from tenant fit-out services and $65.8 million in base rental revenue from the HPC Hosting business.

The results highlighted Applied Digital’s growing exposure to demand for specialised data centre infrastructure capable of supporting large-scale AI computing workloads.

Applied Digital Expands North Dakota AI Data Centre Capacity

Applied Digital continued to increase its operational capacity during the quarter as construction progressed across its North Dakota data centre campuses.

On 1 July, the company delivered an additional 75 megawatts (MW) of capacity at its Polaris Forge 1 facility, bringing the campus’s total operational capacity to 175 MW.

Following the end of the reporting period, Applied Digital completed another 75 MW phase, increasing the facility’s total live capacity to 250 MW.

The company expects to deliver a combined 300 MW of critical IT load across its North Dakota campuses by the end of calendar 2026.

The expansion forms part of Applied Digital’s strategy to develop purpose-built facilities designed to accommodate the power, cooling and infrastructure requirements of advanced AI computing systems.

Chairman and Chief Executive Officer Wes Cummins outlined the company’s long-term objectives.

“Our ambition is to position Applied Digital as the leading company in designing, building, deploying and operating specialised AI factories,” Cummins said. “We are investing with a long-term perspective, prioritising large-scale, sustainable AI computing campuses and securing reliable, high-quality contracts with established, investment-grade hyperscale customers at the forefront of the AI industry.”

The company is concentrating on securing long-term agreements with major technology customers, seeking to establish predictable revenue streams as demand for AI computing capacity increases.

Finland Project Marks First International Expansion

Applied Digital also announced its first expansion outside the United States, securing access to potential power capacity of approximately 1 gigawatt (GW) in Finland.

The proposed development represents an initial step into the European data centre market, where demand for computing infrastructure is increasing alongside investment in artificial intelligence.

Management described the Finnish expansion as a measured approach to entering a market with attractive long-term prospects.

The company intends to maintain its primary focus on developing its existing US portfolio while evaluating opportunities to expand its international presence.

The potential 1 GW capacity in Finland could provide a foundation for future AI infrastructure development, although the project remains separate from the company’s currently contracted US operations.

Contracted Revenue Reaches Approximately $36 Billion

As of 31 August 2026, Applied Digital held leases covering approximately 1.41 GW of critical IT load across five data centre campuses.

These agreements represent approximately $36 billion in contracted revenue over their initial base terms, providing visibility into the company’s potential long-term income from its infrastructure portfolio.

The scale of the contracted capacity reflects Applied Digital’s strategy of securing major customers before completing the development of its AI-focused facilities.

The company also reported cash and cash equivalents of $3.7 billion at the end of the quarter, alongside total debt of $6.4 billion.

The balance sheet figures highlight the substantial financing requirements associated with developing large-scale data centre campuses and supporting the company’s expansion plans.

Applied Digital’s stronger-than-expected quarterly performance, growing operational capacity and international development plans have increased investor attention on its position within the expanding AI infrastructure market.

The company will continue focusing on delivering contracted capacity, completing construction milestones and converting its long-term agreements into operating revenue.

Applied Digital stock price