Track market-moving stories before they get noisy

SHENZHEN, CHINA - JULY 23: In this photo illustration, a smartphone displays the logo of Applied Digital Corporation (NASDAQ: APLD), an American company focused on designing, developing and operating digital infrastructure for high-performance computing and artificial intelligence applications, in front of a screen showing the company's latest stock market chart on July 23, 2026 in Shenzhen, Guangdong Province, China. (Photo illustration by Cheng Xin/Getty Images)

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This article was written by Doug Nathman, with research by his team at Trefis.

Applied Digital (APLD) has declined 44.3% during the last three months as the S&P 500 returned 1.4%, and, at roughly $26.50, the stock is currently around half its 52-week high. Yet it trades at 13.1 times sales against 3.2 for the S&P 500. Both statements are simultaneously true because the share price has little connection to the business visible today.

Why Does Applied Digital Continue To Seem Expensive?Begin with what is operational. Trailing twelve-month revenue stood at $0.6 billion, and, according to management, the fiscal Q4 2026 HPC data center financials mainly reflect only the first 100 megawatts brought online at Polaris Forge 1, with another 75 megawatts delivered there afterward. Contracted critical IT load across its campuses totals 1.41 gigawatts.

Compare that with $36 billion in contracted long-term lease value, rising from $7 billion a year earlier. That backlog is what you are paying for. The underlying business is expanding quickly, while the income statement remains a construction site with only the first meters operating.

Can Applied Digital Truly Build All Of It?Management identifies two limitations: when utility power becomes available and its internal supply chain. It has quantified the latter at roughly 700 megawatts of critical IT load annually, compared with a 1.5 gigawatt build it has contracted to complete within a couple of years. By its own acknowledgment, that slightly exceeds its limit.

The track record suggests otherwise. The first Polaris Forge 1 building required about 24 months from construction commencement to service, while the second took under 12. Management states that every one of its construction projects is currently on time and on budget.

The power needed to enable the next phase lies further ahead. The company’s arrangement with Base Electron encompasses roughly 1.2 gigawatts of natural gas-fired generation in the Dakotas, with that initial capacity arriving in 2029 and 2030.

What Happens If The Schedule Slips?You finance the gap while it persists, using the balance sheet instead of earnings. Operating margin is sharply negative at -35.1%, versus 18.5% for the S&P 500, meaning the company overall still loses money from operations. Debt stands at 71.6% of market value compared with 19.8% for the market, although cash represents 16.0% of total assets versus 6.6%.

A pricing issue sits beneath the backlog. The three latest leases, spanning 810 megawatts, prompted analyst questions about yields lower than peers, while management says its lease rates are toward the upper end of the range for comparable transactions and have risen since those talks. Roughly $20 billion of the $36 billion originated from those three, each signed with the same high investment-grade hyperscaler.

The next meaningful indicator is whether the two expansion leases under negotiation, approximately 100 and 150 megawatts, are completed at the materially higher rates management anticipates.

So, what are you purchasing? A substantial contracted revenue stream, a construction program progressing slightly ahead of the company’s stated capacity, and an income statement that will not determine which prevails for another year or two. Notably, though, given the stock’s nearly 90% twelve-month return and a 35% three-month decline, this is a rather volatile bet.

On paper, Applied Digital (APLD +1.77%) has already sold the next 15 years. The artificial intelligence (AI) data center builder has signed leases covering about 1,410 megawatts (MW) of critical IT load (the power available to tenants' computing equipment) across five campuses. Those contracts add up to about $36 billion over their initial 15-year base terms.

And yet the company generated just $611.3 million of revenue in the fiscal year that ended May 31 -- and posted a $249.2 million net loss attributable to common shareholders.

As of this writing, the growth stock sits near $26, well below the $50.73 it touched over the past year, and the market values the company at about $7.7 billion.

The difference is timing. Applied Digital's leases don't pay until the buildings are finished, powered, and handed over. And only 175 MW of the contracted capacity was live as of the company's late-July update.

Image source: Getty Images.

A $36 billion lease bookThe five campuses (three in North Dakota and two in the South) are leased to CoreWeave and two investment-grade hyperscalers. Each lease runs 15 years on a take-or-pay basis, meaning the tenant owes the rent whether or not it uses the space.

Today's business, however, is far smaller than the contracts suggest. Revenue jumped 167% year over year in fiscal 2026, to $611.3 million, but only $99.8 million of that was base rent from the AI campuses. Most of the rest came from crypto mining hosting and from reimbursed work fitting out tenants' buildings. And the net loss widened slightly year over year as overhead and stock-based compensation climbed.

"We believe delivering on time is a genuine differentiator in this industry," CEO Wes Cummins said in the company's fiscal fourth-quarter update. "We brought Polaris Forge 1's first 100 MW online on schedule and have now scaled total live capacity at the campus to 175 MW."

When does the rent arrive?Applied Digital begins recognizing rental revenue when a property is ready for its intended use and the tenant takes possession. In other words, a signed lease on an unfinished building produces no rental revenue at all.

The annual report even warns that significant construction delays can, in certain circumstances, give tenants the right to terminate.

The company's own schedule of minimum lease payments shows how gradually the money arrives: the leases call for $451 million in fiscal 2027. Fiscal 2028's figure is $1.45 billion, and fiscal 2029's is $2.25 billion. In other words, less than $2 billion of the 15-year, $36 billion total (about 5%) arrives before fiscal 2029. Payments quintuple across those three years as buildings come online, with deliveries phased from Polaris Forge 2's first buildings in calendar 2026 out to the second half of calendar 2028. Once every campus is delivered, the leases call for about $2.3 billion of rent per year.

That schedule, I'd argue, is the heart of the case. Take-or-pay contracts leave little doubt about who owes the rent, so long as the buildings get built. What's still open is the construction itself, and big builds can slip.

The financing isn't cheapThe construction bill, meanwhile, is due now. Applied Digital's capital expenditures came to $2.87 billion in fiscal 2026, up from about $680 million the year before.

It ended fiscal 2026 with $5.0 billion of debt against $4.2 billion of cash, much of it restricted. The subsidiaries' senior secured notes carry rates from 6.75% to 9.25%.

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Macquarie Asset Management has also funded $1.8 billion of perpetual preferred equity, with the right to invest up to $4.9 billion more, for the North Dakota campuses. But that money isn't free either, since preferred capital collects ahead of common shareholders.

At about $7.7 billion, the market is paying more than 12 times fiscal 2026 sales -- and over three times the annual rent the finished portfolio is contracted to produce. That valuation arguably bakes in years of smooth construction.

It might all go to plan. Management has delivered on schedule so far, and the leases likely remove most of the demand risk a project like this usually carries.

But most of the buildings don't exist yet, and lenders and preferred holders get paid before common shareholders do. I'd avoid buying shares today. If Applied Digital keeps delivering campuses on schedule (management expects Polaris Forge 2's first buildings to begin coming online in calendar 2026), I would take another look.

Key Takeaways Applied Digital has $36B in contracted lease revenues, with roughly $20B tied to one hyperscaler.One HPC customer generated 59% of fiscal 2026 continuing-operations revenues, showing concentration.Long-term take-or-pay leases and expansion with existing customers could help diversify future revenues. Applied Digital (APLD - Free Report) is rapidly expanding its AI data center platform, but its growing reliance on a small group of hyperscalers raises concerns about future revenue concentration.

APLD ended fiscal 2026 with approximately $36 billion of contracted lease revenues across 1.4 gigawatts of critical IT load. However, three recently signed 15-year take-or-pay leases with the same high investment-grade hyperscaler account for roughly $20 billion of contracted revenues. Although these campuses span different states, the contracts increase APLD’s dependence on a single customer.

The concentration is already visible in reported results. During fiscal 2026, one HPC customer accounted for 59% of total revenues from continuing operations, while no other customer represented more than 10%. APLD expects a limited number of hyperscalers to continue accounting for a high percentage of revenues.

This concentration could become a concern if a major customer experiences financial difficulties, reduces equipment usage or discontinues using APLD facilities. Such developments could pressure lease prices, profit margins, revenues and cash flow.

Still, 15-year take-or-pay agreements and investment-grade counterparties provide meaningful protection, while additional expansion leases with two existing investment-grade customers could reduce customer concentration and support more diversified revenue growth. Supporting this outlook, the Zacks Consensus Estimate projects revenues to increase 49.7% year over year in fiscal 2027.

That is why hyperscaler concentration poses a meaningful revenue risk, but long-term contracts and customer diversification efforts provide important safeguards.

How Do CORZ & CRWV Stack Up Against APLD?Core Scientific (CORZ - Free Report) competes with APLD in power-rich, high-density AI infrastructure, where securing capacity and major counterparties is critical. In the second quarter of 2026, CORZ demonstrated strong execution, reaching 437 billable MW and 1.1 GW of contracted capacity, while its AMD deal adds diversification. However, concentrating large capacity with AMD and CoreWeave creates counterparty risk if either reduces commitments. CORZ appears competitive, with execution and power availability as key strengths.

CoreWeave (CRWV - Free Report) contends with APLD through a vertically integrated AI-cloud model spanning GPUs, networking, storage, software and managed inference. CRWV is gaining strong momentum, with second-quarter 2026 revenues rising 112% to $2.6 billion, a $104.2 billion backlog and 1.5 GW of active power. Its expanding customer base helps reduce concentration risk, although exposure to large customers remains a potential weakness. CRWV holds an edge in platform depth and scale but faces higher capital and debt requirements.

APLD’s Share Price Performance, Valuation & EstimatesAPLD shares have returned 3.6% year to date compared with the broader Zacks Finance sector’s 7.4% growth.

APLD’s YTD Price Performance
Image Source: Zacks Investment Research

From a valuation standpoint, APLD appears overvalued, trading at a trailing 12-month price/book (P/B) ratio of 4.21, above the Financial - Miscellaneous Services industry’s average of 3.05. The company carries a Value Score of F.

APLD’s Valuation
Image Source: Zacks Investment Research

The fiscal 2027 bottom-line outlook remains challenging, with the consensus estimate currently pegged at a loss of $1.09 per share, representing a 24% decline over the past 30 days. This compares with a loss of 91 cents per share reported in fiscal 2026, highlighting continued pressure on profitability.

Image Source: Zacks Investment Research

APLD stock currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Finding cheap stocks that are primed for a major breakout isn't always easy, but I may have identified one: Applied Digital (APLD -7.65%). Applied Digital is currently trading slightly below $30 per share and is well off its high of about $50 established in June. Applied Digital is a major player in the artificial intelligence (AI) data center space, and it continues to report impressive growth.

But is it primed for a breakout? Let's take a look.

Image source: Getty Images.

Applied Digital's business is booming Applied Digital's business is pretty simple: It builds data centers and then rents them out. This is a complex business, as it must identify prime building spots, coordinate construction, and find clients to rent the centers. Still, it's a business that is booming thanks to huge and unprecedented AI computing demand.

This growth is showing up in a big way, as Applied Digital's revenue soared 407% to nearly $260 million during its fourth quarter of fiscal year 2027 (ending May 31). Wall Street expects huge growth over the next few years as more of its construction sites come online. For 2027, it expects 37% revenue growth, but that figure jumps to 127% in FY 2028. Those are exciting projections, but there is just one problem: Applied Digital isn't profitable and has no plans to be in the near future.

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Building data centers isn't cheap, and it requires a significant amount of funding to do so. With Applied Digital experiencing the greatest data center boom it will ever see, it must strike while the iron is hot and take advantage of the situation, even if it means operating at a loss for a few years. This makes it a risky stock, but if it comes out on the other side OK, it will be a great investment.

The market normally compensates risk with valuation, with riskier stocks trading at a lower valuation to make up for the higher risk. This is also where greater potential for gains comes from, since higher-risk assets should provide greater returns, albeit at a lower success rate.

The problem is, the market is betting that Applied Digital will be nearly a guaranteed win.

APLD PS Ratio data by YCharts.

At 13 times sales, the stock isn't cheap. However, that doesn't incorporate the fact that a lot of Applied Digital's data centers don't come online for a while, which could make this stock look far more undervalued than it appears. However, we'll have to see if that comes to fruition over the next few years.

As a result, Applied Digital will likely rise and fall with the demand for AI stocks. When demand is high, Applied Digital's stock will soar. When it's low (like it is right now), it will sink. Until Applied Digital can reach the point where it's a profitable business, this association with AI investing demand will continue. I think there are far better AI investments out there right now besides Applied Digital.

Applied Digital (APLD -7.65%) stock has been on a roller-coaster ride this year. However, the past few months have been quite painful for this artificial intelligence (AI) infrastructure specialist.

Applied Digital stock has pulled back 45% from the 52-week high it reached almost three months ago. However, a closer look at the company's surging growth and the bright prospects of the AI data center infrastructure market suggests that the recent pullback in this stock could be a buying opportunity.

Let's look at the reasons why.

Image source: Getty Images.

The market is underestimating Applied Digital's growth potentialApplied Digital is in the business of designing, building, and operating data centers designed to handle AI and high-performance computing (HPC) workloads. This puts the company right in the middle of a lucrative growth opportunity.

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Market research firm Dell'Oro Group estimates that global spending on AI data centers could exceed $3 trillion by the end of the decade, driven by the need to support the growth in AI workloads in the cloud. What's worth noting is that Dell'Oro has almost doubled its data center capex outlook for 2030 since January 2026.

It won't be surprising to see this estimate move higher in the future, as more companies integrate AI into their operations to unlock productivity gains. A report released by workplace advisory services provider Gallup earlier this year noted that 65% of employees using AI in organizations have reported a jump in productivity.

So, the massive addressable market that Applied Digital is poised to capitalize on could get even bigger in the future. The good news is that the company is positioning itself to capitalize on the tremendous opportunity in this market. The company posted a 167% increase in revenue in fiscal 2026 (ending May 31) to $611 million. Importantly, it also reduced its diluted loss per share by 22%.

Applied Digital's growth rate could accelerate substantially in the future, given its robust lease revenue pipeline. Applied Digital has leased out 1.4 gigawatts (GW) of data center capacity across its five data center campuses. The company estimates that these leases will generate $36 billion in lease revenue across 15 years under the base contractual term.

Importantly, Applied Digital has started delivering the data center capacity, which will help it convert the lease revenue pipeline into actual revenue. The company estimates that it will complete delivery of the entire 1.4 GW of the contracted data center capacity by the second half of 2028. What's more, Applied Digital notes that the renewal options included in these lease contracts could take its potential long-term lease revenue to an impressive $86 billion.

But even if Applied Digital's customers don't exercise the renewal options, which seems quite unlikely amid the booming data center demand, its annual revenue run rate could be around $2 billion over the next 15 years. That's a conservative estimate, as the company is looking to add new data center campuses, in addition to increasing capacity at existing campuses.

So, Applied Digital's top line could jump substantially from its fiscal 2026 levels, and that's precisely what analysts are expecting.

APLD Revenue Estimates for Current Fiscal Year data by YCharts

The terrific top-line growth will send the stock soaringThe $2.72 billion revenue estimate for fiscal 2029 points to a jump of almost 4x in Applied Digital's top line from fiscal 2026 levels. Such impressive growth explains why this AI stock is trading at a relatively expensive 12 times sales, while the U.S. tech sector has an average sales multiple of 7.4.

The good news is that the recent pullback in Applied Digital stock has made it relatively inexpensive to buy right now, as it was trading at over 38 times sales at the end of May. Assuming Applied Digital trades at the U.S. tech sector's average sales multiple after three years and its revenue reaches $2.72 billion in fiscal 2029, its market cap could increase to $20 billion.

That's a potential upside of 156% from current levels. So, investors looking to buy a top growth stock to capitalize on the AI data center boom should consider using the pullback in Applied Digital to buy more shares before it goes on a bull run.

Business is booming, but the sustainability of that boom is unlikely to persist.

*Stock prices used were the afternoon prices of Aug. 18, 2026. The video was published on Aug.20, 2026.

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Key Takeaways PENG's fiscal Q3 revenues rose 48% to a record $479M, while AI-driven businesses grew 104%.APLD has $36.2B of 15-year contracted revenues but faces heavy spending, losses and customer concentration.PENG trades at 1.25X forward sales versus APLD's 7.97X, supporting its more attractive valuation. Penguin Solutions (PENG - Free Report) provides AI infrastructure, advanced computing and memory solutions designed to help enterprises and other customers deploy increasingly demanding AI workloads. Applied Digital (APLD - Free Report) develops and operates large-scale data centers built for high-performance computing, including AI and accelerated-computing applications.

Both companies stand to benefit from rising demand for AI infrastructure, although they offer different avenues for investors to participate in the trend. Their exposure to the physical and technical foundations supporting modern AI workloads makes them relevant peers.

Per the Mordor Intelligence report, the global AI infrastructure market is projected to reach $202.48 billion by 2031, driven by rapid AI adoption, expanding data-center capacity and growing computing requirements. This creates solid opportunities for both companies. Let’s analyze which AI Infrastructure stock offers the better investment opportunity now.

The Case for PENG StockPenguin Solutions is strengthening its position as an AI infrastructure and memory provider through a full-stack AI Factory Platform spanning ClusterWareAI, MemoryAI, ComputeAI, OriginAI and end-to-end design, build, deployment and managed services. Its differentiated exposure is increasingly centered on the memory bottleneck created by inference and agentic AI workloads.

Recent financial performance is a major strength. In the third quarter of fiscal 2026, revenues reached a record $479 million, up 48% year over year, while non-GAAP operating income rose 67% to $64 million. Integrated Memory revenues surged 111.4%, driven by strong AI-driven DRAM and Flash demand, and non-hyperscale AI infrastructure also gained momentum. Importantly, PENG's AI-driven businesses accounted for 74% of total sales and grew 104% year over year, underscoring the strength of the company’s AI-focused portfolio. Reflecting this momentum, management raised its fiscal 2026 revenue-growth guidance to 22% ±2% and non-GAAP EPS guidance to $2.60 ±$0.05, signaling confidence in sustained growth.

The opportunity is supported by customer expansion, including Deepgram, a Tier-1 financial institution, Haein and sovereign deployment Spectra, alongside NVIDIA and Dell partnerships. Product innovation provides another potential growth lever. PENG's MemoryAI KV Cache Server is designed for inference and agentic AI workloads and targets up to 2x higher inference performance, up to 8x lower time-to-first-token latency and 4x-5x greater cost-effectiveness than GPU HBM.

PENG’s growth comes with risks, including memory-price volatility, supply constraints, customer concentration, competitive pressure, tariffs and technology shifts. Significant working capital requirements are exerting additional pressure, as inventory levels have reached $498 million and operating cash flow saw an outflow of $75 million in the third quarter of fiscal 2026.

The Zacks Consensus Estimate for PENG's fiscal 2026 and 2027 earnings is pegged at $2.6 and $3.4 per share, respectively. While the estimates remain unchanged over the past 30 days, both have been revised upward over the past 60 days, implying year-over-year growth of 36.84% and 30.77%, respectively, and indicating sustained long-term growth momentum.

Image Source: Zacks Investment Research

The Case for APLD StockApplied Digital offers significant exposure to the AI infrastructure buildout, but the investment case carries substantial capital, execution and financing risks. Fiscal 2026 investing cash outflow reached $2.9 billion, driven largely by about $2.2 billion of property-and-equipment investment, while long-term debt borrowings increased by $4.1 billion. APLD also reported a $250.3 million net loss attributable to common stockholders for fiscal 2026.

Applied Digital’s AI/HPC data-center strategy is highly capital-intensive. It requires substantial upfront expenditure on land, power infrastructure, buildings, cooling systems, electrical equipment and other facility developments. The company spent $3.04 billion on capital expenditures in fiscal 2026, of which nearly $2.99 billion was associated with the HPC Hosting Business, compared with $976.5 million in the prior year. Significant property-and-equipment investments are expected to continue through fiscal 2027, keeping capital requirements elevated.

Customer concentration adds another layer of risk. One HPC customer represented 59% of continuing-operations revenues, while the HPC segment had only three customers. This creates meaningful dependence on a small customer base, making lease commencement, expansion and retention particularly important to future results. Intense competition exists among established operators like Digital Realty and Equinix, hyperscalers building their own facilities, private developers and competitors ranging from crypto to HPC sectors. Construction delays, permitting issues, the availability of labor and equipment, power outages, rising costs and technological changes can also exert pressure on profitability.

Still, APLD’s AI infrastructure business is gaining meaningful momentum. The HPC Hosting segment benefited from the ramp-up of its first data center at Polaris Forge 1, driving a sharp improvement in segment profitability as operations scaled and tenant activity increased. As of May 31, APLD had 1.41 GW of contracted critical IT load and about $36.2 billion of 15-year contracted revenues across five campuses. Its power-advantaged sites, liquid-cooled, high-density designs and repeatable AI Factory model provide differentiation. The company is marketing another 1.7 GW and pursuing 1.2 GW of natural-gas generation, while higher rental rates and potential customer expansions could support future growth.

For fiscal 2027, the Zacks Consensus Estimate projects a loss of $1.09 per share, with the estimate widening by 9 cents over the past 30- and 60-day periods. This compares with a loss of 91 cents reported for fiscal 2026, suggesting that the substantial AI infrastructure opportunity has yet to translate into near-term earnings growth and underscoring the execution risk embedded in the stock.

Image Source: Zacks Investment Research

PENG Shares Outperform APLDPenguin Solutions has decisively outperformed Applied Digital year to date, with PENG shares soaring 170.7% compared with APLD’s 15.1% gain, highlighting significantly stronger investor momentum and market confidence in PENG’s growth prospects.

PENG’s stronger stock performance has been supported by record financial results, accelerating AI-driven demand, robust memory growth and an improved fiscal 2026 outlook, reinforcing the company’s growth narrative.

In contrast, APLD’s more muted performance likely reflects investor concerns surrounding its capital-intensive AI infrastructure expansion, continued losses, customer concentration and execution risks as it scales its data-center footprint.

PENG vs. APLD Stock’s Performance
Image Source: Zacks Investment Research

Valuation: PENG Is Cheaper Than APLDFrom a valuation standpoint, PENG looks more attractively valued, trading at a forward 12-month Price/Sales ratio of 1.25X compared with APLD at 7.95X, which appears relatively expensive. Penguin Solutions' lower valuation offers investors a more reasonable entry point than APLD, making it an attractive option at current levels.

PENG vs. APLD: P/S F12M Ratio
Image Source: Zacks Investment Research

ConclusionBased on these factors, PENG stands out as the stronger AI infrastructure stock, supported by faster growth, rising AI demand, stronger market momentum and a significantly more attractive valuation than APLD.

Currently, PENG sports a Zacks Rank #1 (Strong Buy), while APLD carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Applied Digital (APLD +1.25%) has secured billions in contracted AI infrastructure revenue and controls a multi-gigawatt power pipeline. As its data centers come online, the company could enter a dramatic new growth phase, but its financing needs and demanding construction schedule create a critical test for investors.

Stock prices used were the market prices of July 23, 2026. The video was published on Aug. 2, 2026.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Posted by Defense World Staff on Aug 7th, 2026

Applied Digital Corporation (NASDAQ:APLD – Get Free Report)’s stock price dropped 3.4% during mid-day trading on Thursday following insider selling activity. The company traded as low as $28.17 and last traded at $28.86. Approximately 12,499,904 shares traded hands during trading, a decline of 49% from the average session volume of 24,360,061 shares. The stock had previously closed at $29.87.

Specifically, Director Richard N. Nottenburg sold 75,000 shares of the firm’s stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $31.15, for a total value of $2,336,250.00. Following the transaction, the director directly owned 133,378 shares in the company, valued at $4,154,724.70. This trade represents a 35.99% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink.

Analysts Set New Price Targets APLD has been the subject of a number of research reports. Citigroup reiterated a “market outperform” rating on shares of Applied Digital in a report on Monday. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Applied Digital in a research report on Tuesday, July 21st. Craig Hallum boosted their price objective on shares of Applied Digital from $75.00 to $79.00 and gave the stock a “buy” rating in a research note on Tuesday, June 9th. Lucid Cap Mkts upgraded shares of Applied Digital to a “strong-buy” rating in a research note on Wednesday, May 27th. Finally, Zacks Research raised shares of Applied Digital from a “strong sell” rating to a “hold” rating in a research note on Monday, July 27th. Three research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $68.15.

Check Out Our Latest Research Report on Applied Digital

Applied Digital Stock Performance The stock has a market cap of $8.41 billion, a PE ratio of -32.43 and a beta of 5.75. The stock has a fifty day simple moving average of $35.84 and a two-hundred day simple moving average of $34.13. The company has a debt-to-equity ratio of 2.88, a quick ratio of 4.01 and a current ratio of 4.01.

Applied Digital (NASDAQ:APLD – Get Free Report) last issued its quarterly earnings data on Monday, July 27th. The company reported ($0.39) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.09) by ($0.30). The firm had revenue of $240.35 million during the quarter, compared to analyst estimates of $96.85 million. Applied Digital had a negative net margin of 37.78% and a negative return on equity of 16.42%. The firm’s revenue was up 406.3% compared to the same quarter last year. During the same period last year, the business earned ($0.24) EPS. Equities analysts anticipate that Applied Digital Corporation will post -0.98 EPS for the current fiscal year.

Institutional Investors Weigh In On Applied Digital Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Activest Wealth Management acquired a new position in shares of Applied Digital in the fourth quarter worth about $25,000. Ameriflex Group Inc. acquired a new stake in Applied Digital during the 4th quarter valued at approximately $25,000. McMillan Office Inc. acquired a new stake in Applied Digital during the 4th quarter valued at approximately $25,000. Larson Financial Group LLC increased its holdings in Applied Digital by 56,450.0% during the 3rd quarter. Larson Financial Group LLC now owns 1,131 shares of the company’s stock worth $26,000 after purchasing an additional 1,129 shares during the last quarter. Finally, Northwestern Mutual Wealth Management Co. purchased a new stake in Applied Digital during the 2nd quarter worth approximately $26,000. Hedge funds and other institutional investors own 65.67% of the company’s stock.

About Applied Digital (Get Free Report)

Applied Digital (NASDAQ: APLD) is a technology company specializing in the development and operation of large-scale digital infrastructure and sustainable Bitcoin mining solutions. Through its integrated platform, the company designs, builds and manages turnkey data center facilities while also providing comprehensive hosting services for cloud, colocation and enterprise computing needs. Applied Digital’s modular approach to facility design enables rapid deployment of capacity and streamlined integration of power, cooling and network connectivity.

In addition to its data center business, Applied Digital operates a network of Bitcoin mining sites that leverage vertically integrated capabilities, including hardware procurement, mining farm engineering, energy management and real-time performance monitoring.

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Mohammad Saidal Lavanway Mohmand, Chief Financial Officer of Applied Digital Corporation (APLD -2.21%), reported a non-discretionary disposition of 96,408 shares at $27.39 per share on July 31, 2026. SEC Form 4 filing

Transaction summaryMetricValueTransaction value~$2.6 millionShares sold96,408Post-transaction shares (directly held)~888,000Post-transaction value$24.33 millionTransaction value based on SEC Form 4 weighted average sale price ($27.39); post-transaction value based on July 31, 2026, market close ($27.39).

Key questionsWhat initiated this ~$2.6 million disposition?
The transaction was a non-discretionary sell-to-cover event required to meet tax liabilities arising from the vesting of 245,000 performance stock units on July 31, 2026.How did the recent vesting event impact the CFO's total direct position?
Despite tax-related withholding, the CFO’s total direct equity position increased following the vesting of performance stock units and the receipt of shares distributed by 272 Capital, LP, resulting in a final holding of ~888,000 shares.What is the status of the insider's remaining equity incentives?
Mohmand continues to hold a significant equity interest through direct ownership and additional derivative securities, including restricted stock units that vest over a multi-year period.Company OverviewMetricValueShare Price (as of market close 2026-08-03)$29.49Market Capitalization$9.0 billionRevenue (TTM)$576.2 millionNet Income (TTM)-$204.8 millionCompany SnapshotApplied Digital Corporation designs, develops, and operates digital infrastructure solutions for high-performance computing and artificial intelligence industries, offering GPU computing solutions, data center hosting services, and HPC hosting capabilities to support critical AI, machine learning, and computational workloads.The company generates revenue through two primary business segments: its Data Center Hosting Business and HPC Hosting Business, which provide infrastructure services and computing solutions to enterprise customers requiring specialized computational resources.Applied Digital serves customers in the artificial intelligence, machine learning, and high-performance computing sectors across North America, with a particular focus on enterprises requiring GPU-accelerated infrastructure for advanced computational applications.Applied Digital operates as a specialized digital infrastructure provider serving the high-growth artificial intelligence and high-performance computing markets. With a market capitalization of $9.0 billion and TTM revenue of $576.2 million, the company has demonstrated significant market momentum, reflected in its 108.45% one-year share price appreciation. As a capital-intensive infrastructure provider, Applied Digital is positioned at the intersection of accelerating demand for AI computing resources and enterprise digital transformation initiatives.

What this transaction means for investorsMohammad Saidal Lavanway Mohmand, an executive at Applied Digital Corporation (APLD), recently sold approximately 96,000 shares of company stock. Here are some key takeaways for investors.

To begin, let’s note that insider transactions happen for many reasons. Sometimes, executives are selling as part of a longstanding, pre-arranged plan. In this case, the executive in question liquidated shares granted as part of a compensation package, likely to fulfill tax obligations. In other words, not all insider sales reflect a bearish bias by executives — investors should take note.

As for Applied Digital itself, the company has performed very well over the last few years. Shares have delivered a total return of 545% since 2022, with a staggering compound annual growth rate of 54.1%. For comparison, the S&P 500 has generated a total return of 84%, equating to a CAGR of 15.3%.

The company has been a major beneficiary of the AI revolution. Specifically, Applied Digital is thriving due to its red-hot high-performance computing (HPC) division. This unit leases HPC capacity, giving organizations access to data center resources. As enterprises continue to pour hundreds of billions into AI, Applied Digital remains well placed to cash in. The company’s HPC division printed operating margins of over 90% in its latest quarter. What’s more, management noted that the company has a lease backlog of around $36 billion — signaling that demand remains sky-high.

In summary, investors seeking a growth stock at the forefront of the AI build-out may want to take a closer look at Applied Digital.

Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Applied Digital (APLD +20.46%) is the tale of two tapes. The stock is up about 150% over the past year, but its shares have also been nearly cut in half from their spring highs. With the company's revenue surging, the question on many investors' minds now is whether it's time to buy the stock when it's down.

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Revenue growth surges Applied Digital is more of an AI data center landlord than it is a tech company. It spun out its cloud computing business and merged it with EKSO Bionics Holding earlier this year to create a new company called ChronoScale (CHRN +13.71%), although it still holds a 96% stake in the new entity. Meanwhile, it is considering converting into a real estate investment trust (REIT).

Applied Digital's main business today is building and operating data centers designed to handle AI workloads. However, it does still have a data center hosting business that serves cryptocurrency miners, which was its original business. Its biggest attribute is its access and ability to source cheap power and know-how for constructing facilities that can house massive data centers.

Applied Digital has been seeing rapid revenue growth, which continued in fiscal Q4 with its revenue soaring 407% to $258.7 million. Excluding the spun-off ChronoScale, revenue rose from $38 million to $240.4 million.

The company's high-performance computing (HPC) business accounted for $203 million of its revenue, with $44.1 million tied to base rent and $6.5 million related to tenant recoveries. The bulk of it, $152.1 million, came from tenant fit-out services, which is revenue it gets from constructing dedicated facilities for large customers.

This revenue is coming mostly from its largest customer, CoreWeave. Tenant fit-out services have low gross margins, but they do lead to future, higher-margin recurring revenue.

Its data center hosting business, meanwhile, saw its revenue slip by 2% to $37.63 million, with operating income of $12.5 million. This is Applied Digital's legacy business, comprising two facilities in North Dakota with 286 megawatts of power dedicated to cryptocurrency mining.

On the profitability front, the company reported adjusted net income of $12.9 million, or $0.04 per share. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $42.4 million, compared to $1 million a year ago.

Applied Digital ended the quarter with $1.6 billion in unrestricted cash against $5 billion in debt. It reported operating cash flow of $89.7 million and negative free cash flow of $2.8 billion.

During the quarter, Applied Digital signed leases for three new campuses worth $20 billion in lease value with a single high-investment-grade hyperscaler. In total, it has now signed leases for five campuses, bringing its contracted long-term lease value to $36 billion.

Image source: Getty Images.

Applied Digital continues to grow revenue quickly, although much of this is coming from low-margin non-recurring tenant fit-out service revenue. However, this does help set the stage for future recurring revenue. At the same time, the company is burning through cash, expanding its data center campuses, and taking on significant debt.

That said, its business should be inherently less risky than that of neocloud operators. It isn't buying pricey graphics processing units (GPUs), so it faces less technology obsolescence risk, and it is getting long-term leases. Having CoreWeave as its primary customer is a risk, but a large hyperscaler becoming its primary tenant in the future will be a plus.

With Applied Digital projecting it will hit a $1 billion net operating income (NOI) run rate a year from now and a strong, growing backlog, the stock looks intriguing here. I'd still place it in the high-risk, high-reward category, but with power still one of the big AI infrastructure bottlenecks, the company looks to be in a solid long-term position.

Key Takeaways APLD has 1.41 GW of contracted IT load across five campuses, backing about $36 billion in lease revenues.Applied Digital funded 600 MW at Polaris Forge through project debt, Macquarie equity and its balance sheet.Power and supply constraints, not demand, are the main limits as Polaris Forge 1 reaches 175 MW live. Applied Digital Corporation (APLD - Free Report) used its fiscal fourth-quarter 2026 earnings call to emphasize contracted scale, financing progress and execution across its expanding AI data center portfolio.

Management’s message centered on converting a large development pipeline into operating capacity while securing power, controlling construction costs and lowering the capital required to fund growth.

APLD Builds Around Contracted ScaleChairman and CEO Wes Cummins said Applied Digital now has 1.41 gigawatts of contracted critical IT load across five campuses, supporting approximately $36 billion of base-term lease revenues.

Three recent leases with the same high investment-grade hyperscaler cover 810 megawatts and approximately $20 billion of contracted revenues. Cummins described the concentration as part of a deliberate shift toward durable agreements with financially stronger customers.

Management is also marketing another 1.7 gigawatts across multiple states. Expansion options under negotiation with two existing customers could add 250 megawatts and more than $6 billion of contracted revenue based on current rates and lease durations.

Applied Digital Targets Higher Lease PricingCummins said rental rates have increased during the past six months, creating room for better economics on new campuses and customer expansions.

A Lake Street Capital Markets analyst asked about the proposed 100-megawatt and 150-megawatt expansions. Cummins said both would involve existing customers and should carry materially higher pricing than their current agreements.

During a Northland Securities exchange about development yields, Cummins defended the recent leases as competitive for their scale, duration and customer quality. He added that management uses conservative cost and margin assumptions when evaluating project returns.

APLD Lowers Its Cost of CapitalCFO Saidal Mohmand highlighted financing as a central part of the company’s development model. Applied Digital secured funding for all 400 megawatts at Polaris Forge 1 and 200 megawatts at Polaris Forge 2.

The company issued $2.15 billion of 6.75% senior secured notes and $1.59 billion of 7% senior secured notes. Mohmand said the latter financing priced 225 basis points below the company’s first project bond placement.

Mohmand described a three-part funding structure combining Applied Digital’s balance sheet, Macquarie’s contribution of three-quarters of required project equity and site-specific debt. Management expects investment-grade tenant agreements to support more favorable financing for its next three campuses.

Applied Digital Flags Power and Supply ConstraintsCummins identified power availability and supply-chain capacity as the main limits on growth rather than customer demand.

The company is working with Base Electron on approximately 1.2 gigawatts of natural gas-fired generation in the Dakotas. Management views added generation and regional transmission projects as essential to expanding existing campuses beyond their initial capacity.

Cummins also said the company had previously secured supply-chain capacity for roughly 700 megawatts of annual critical IT load. Applied Digital is now building beyond that level, placing greater importance on equipment availability, construction sequencing and labor planning.

APLD’s Results Reflect an Early RampFiscal fourth-quarter adjusted revenues were $240.4 million, which beat the Zacks Consensus Estimate of $99.3 million. It incurred a loss of 39 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 18 cents.

HPC hosting generated $203 million of revenues, including $152.4 million from tenant fit-out services and $44.1 million from base rent. Adjusted EBITDA reached $42.4 million, and net operating income was $39.9 million.

Mohmand stressed that quarterly HPC results primarily reflected the first 100 megawatts operating at Polaris Forge 1. The company subsequently brought another 75 megawatts online, taking live capacity at the campus to 175 megawatts.

Applied Digital Keeps Execution CentralManagement maintained a confident tone on demand but repeatedly returned to construction discipline. Cummins said all current projects were on time and on budget, while noting that power and supply-chain management remain critical.

Applied Digital now expects to reach a $1 billion annual net operating income run rate within one year, three years earlier than its original target. The company’s priorities remain delivering contracted capacity, financing projects efficiently and expanding existing campuses.

Zacks Signals Remain CautiousAPLD currently carries a Zacks Rank #3 (Hold). That ranking indicates a neutral near-term earnings revision outlook rather than a clear signal of outperformance or underperformance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has a Value, Growth, Momentum and VGM Score of F each, indicating weak characteristics across all four measures. Style Scores work best alongside the Zacks Rank, with A or B grades viewed more favorably. The Zacks Rank can change as analyst estimates are revised following the newly reported results.

Applied Digital Corp (NASDAQ:APLD) reported fourth-quarter revenue of $258.7 million, up 407% from a year earlier, as the company accelerates its shift into a pure-play AI infrastructure developer.

The company posted adjusted earnings of $0.04 per share for the quarter, compared with analyst estimates of a loss of $0.22 per share.

Applied Digital said it is building five multibillion-dollar AI Factory campuses for two hyperscalers and CoreWeave.

The company has secured roughly $20 billion in newly contracted hyperscaler leases, including an $11 billion contracted revenue lease with CoreWeave for Polaris Forge 1 and a $5 billion hyperscaler lease for Polaris Forge 2.

Adjusted EBITDA came in at $42.4 million. The bulk of quarterly revenue, $152.4 million, came from one-time tenant fit-out services rather than recurring lease income.

GAAP net loss nearly doubled year-over-year to $110.6 million, driven in part by a $127.8 million stock-based compensation charge.

"We are still in the early innings of what we believe will likely be the largest buildout of critical infrastructure in modern economic history,” CEO Wes Cummins said. “We see demand for high-power-density, purpose-built AI data centers remaining extremely robust."

Shares were up 3.4% in premarket trading.

Applied Digital Corporation (APLD) Q4 2026 Earnings Call July 27, 2026 5:00 PM EDT

Company Participants

Wesley Cummins - Chairman, CEO, Secretary & Treasurer
Mohammad Saidal Mohmand - Chief Financial Officer

Conference Call Participants

Matt Glover - Gateway Group, Inc.
Michael Grondahl - Northland Securities, Inc.
Nick Giles - B. Riley Securities, Inc., Research Division
Robert Brown - Lake Street Capital Markets, LLC, Research Division
Derrick Whitfield - Texas Capital Securities, Research Division
George Sutton - Craig-Hallum Capital Group LLC, Research Division
John Todaro - Needham & Company, LLC, Research Division
Darren Paul Aftahi - Lucid Capital Markets, LLC, Research Division
Michael Donovan - Compass Point Research & Trading, LLC, Research Division

Presentation

Operator

Good afternoon, and welcome to Applied Digital's Fiscal Fourth Quarter 2026 Conference Call. My name is Pascal Berman, and I will be your operator today.

Before this call, Applied Digital issued its financial results for the fiscal fourth quarter ended May 31, 2026, in a press release, a copy of which has been furnished in a report on Form 8-K filed with the Securities and Exchange Commission or SEC, and will be available in the Investor Relations section of the company's website.

Joining us on today's call are Applied Digital's Chairman and CEO, Wes Cummins; and CFO, Saidal Mohmand. Following their remarks, we will open the call for questions. Before we begin, Matt Glover from Gateway Group will make a brief introductory statement. Mr. Glover, you may begin.

Matt Glover
Gateway Group, Inc.

Thank you, operator. Hello, everyone, and welcome to Applied Digital's Fiscal Fourth Quarter 2026 Conference Call. Before management begins formal remarks, we'd like to remind everyone that some statements we are making today may be considered forward-looking statements under the securities laws and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our

Live Coverage Updates appear automatically as they are published.

Live Updates Pinned 2 hours ago

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This live blog is being updated by Thomas Richmond, a 24/7 Wall St. contributor. You’ll get expert analysis of Applied Digital’s earnings.

Simply stay on this page, and new updates will appear below automatically. We expect APLD to release earnings shortly after 4:05 p.m. ET.

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That wraps up our initial coverage of APLD’s Q4 results. Thank you for stopping by!

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Tonight’s report from Applied Digital (NASDAQ:APLD) delivered several items Wall Street was not expecting:

Upside Surprises Backlog jump: Contracted revenue vaulted to $36 billion across 1.4 gigawatts, well above the $16 billion figure carried into the report. New hyperscaler: A high-investment-grade tenant signed 810 megawatts across three leases, addressing CoreWeave concentration head-on. Revenue explosion: Adjusted revenue of $240.4 million versus consensus $95.32 million, with adjusted EBITDA at $42.4 million from $1.0 million a year ago. Concerns and One-Time Items Stock-based comp: $127.8 million drove the GAAP loss of $0.39, missing the $0.28 expected loss and extending the accelerated-vesting pattern. Fit-out lumpiness: HPC Hosting included $152.4 million in tenant fit-out, a low-margin, non-recurring line inflating the headline. 1 hour ago

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Applied Digital delivered another 75 megawatts of capacity at Polaris Forge 1 on schedule, lifting the AI campus to 175 megawatts of live capacity.

The company’s first 100-megawatt building began operating in October 2025, providing evidence that its massive contracted pipeline is progressing from signed leases into revenue-generating infrastructure.

The company has raised billions to support the next phase. Applied Digital completed a $2.15 billion secured-notes offering to fund Polaris Forge 2, followed by another $1.59 billion offering to finance the fourth building at Polaris Forge 1. It also expanded its committed revolving credit facility to $430 million.

Applied Digital now has approximately 1.4 gigawatts under construction across five campuses. The next major test is whether it can repeat the on-time Polaris Forge delivery across a far larger development pipeline without financing costs or construction delays eroding the economics.

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Applied Digital has now secured approximately 1.4 gigawatts of critical IT load across five AI data center campuses. Those leases represent roughly $36 billion in contracted revenue over their initial 15-year terms, rising to approximately $86 billion if customers exercise every renewal option.

The newest growth engine is a high-investment-grade hyperscaler that signed three separate leases totaling 810 megawatts. Two 300-megawatt campuses carry approximately $7.5 billion in contracted revenue apiece, while a third 210-megawatt site adds another $5.2 billion.

Applied Digital is also marketing another 1.7 gigawatts of capacity across multiple states. The backlog has officially reached hyperscale, shifting the investment debate from customer demand to whether Applied Digital can deliver all five campuses on schedule.

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Applied Digital delivered fiscal Q4 revenue of $258.7 million, up 407% year over year, as its AI infrastructure buildout began translating into reported results. This resulted in a 152% revenue beat vs consensus estimates.

Adjusted revenue excluding ChronoScale reached $240.4 million, while adjusted EBITDA surged to $42.4 million from just $1.0 million one year ago.

The HPC Hosting segment generated $203.0 million in quarterly revenue and $26.2 million in operating profit. That included $44.1 million in base rent, $152.4 million from tenant fit-out services, and $6.5 million in tenant reimbursements.

Applied Digital still reported a GAAP loss of $0.39 per share, partly reflecting $127.8 million in stock-based compensation. However, adjusted net income reached $12.9 million, or $0.04 per diluted share, compared with an adjusted loss of $0.03 per share last year.

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Applied Digital just reported Q4 earnings, with shares initially up 4% following the report. Here are the key numbers:

Revenue: $240.35 million vs. $95.32 million expected EPS: Loss of $0.39 vs. loss of $0.28 expected Quick Read:

Revenue crushed expectations by 152%, climbing 532% year over year and 90% sequentially.

The massive top-line beat outweighed the wider-than-expected loss, although EPS declined 63% year over year and 8% sequentially.

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Top 5 Analyst Questions: Can HPC Hosting sustain $71 million ex-fit-out run rate into Q1 FY27? Is Delta Forge 1’s lease signed to hit mid-2027 RFS? Status of ChronoScale/EKSO closing this quarter? Progress on the three-site, 900 MW hyperscaler exclusivity? Timeline to refinance from project loans into ABS? Key Topics, Buzzwords, Red Flags Key Topics: CoreWeave’s A3 SPV rating, Base Electron’s 1.2 GW power buildout, and reaffirmation of the $1B NOI five-year goal. Buzzwords: “direct-to-chip liquid cooling,” “Ready-for-Service,” “NOI run rate,” “tenant fit-out,” “multi-gigawatt pipeline.” Red Flags: Widening GAAP losses beyond $100.9M, another SG&A spike from accelerated stock comp, softer HPC base rent, or hedging language on lease signings this year. Insider selling from CEO, CFO, and President at $35.52–$45.20 raises the bar for a confidence-restoring guide. 2 hours ago

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Wall Street expects Applied Digital (NASDAQ:APLD) to post Q4 EPS of -$0.19 on revenue of $95.3 million, a sequential step down from Q3’s $126.64 million. Shares last traded at $26.63, down 2.02% on the day, extending a brutal 43.28% slide since June 1.

Metrics That Matter HPC Hosting revenue after last quarter’s $71.0 million Timing on the second 150 MW Polaris Forge 1 building Initial 200 MW Polaris Forge 2 capacity CoreWeave concentration Reaffirmation of the $1 billion NOI target within five years What Could Move Shares Options positioning skews bullish, with a 3.28:1 call/put ratio across earnings-week contracts. An HPC Hosting shortfall or slipped Polaris timelines could accelerate selling, while a beat plus a new hyperscaler contract could spark a snap-back toward the $73.05 average analyst target.

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Options positioning heading into tonight’s report skews decisively bullish. The full-chain put/call ratio sits at 0.42, and the July 31 weekly shows call volume of 17,309 versus 5,896 puts, a 2.94:1 skew.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Applied Digital didn't make the cut. Grab the names FREE today.

Institutional bets extend further out. January 2027 calls hold 173,554 contracts in open interest against a put/call ratio of just 0.14, and January 2028 shows a 6.54:1 call OI skew. Insiders have echoed the tone with 10 recent transactions and net buying.

The roughly 13.72% implied move quantifies the expected swing by Friday’s close. Q3 2026 delivered a 142.86% EPS beat, yet Applied Digital (NASDAQ:APLD) closed -7.99% on earnings day before rallying 17.68% over the following week. Tonight pairs bullish flow with a battered chart.

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Tonight’s fiscal Q4 2026 report from Applied Digital (NASDAQ:APLD) arrives with shares at $26.12, down 2.23% intraday. Options are pricing a 13.72% post-earnings swing.

The Bar to Clear: Q3’s $126.64 million revenue and adjusted EPS of $0.09 reset expectations sharply. Investors want HPC Hosting to hold Q3’s $71 million run rate and Data Center Hosting to build on $37.5 million.

Move Triggers: Guidance on the second 150 MW Polaris Forge 1 facility, any new hyperscaler leases beyond the $16 billion backlog, ChronoScale/EKSO closing timeline, and commentary on the $2.7 billion debt load could drive the stock after earnings.

History Warns Both Ways: Q3’s 142.86% beat still sent shares -7.99% on release day before a 17.68% one-week rally. With Morgan Stanley’s $36.50 Equal Weight target framing skepticism, execution details matter more than the headline beat.

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With shares at $26.37 and consensus looking for -$0.19 EPS on $95.3M revenue, here is where the Bull vs Bear case stands.

Bull Case Beat streak: Five straight beats, with Q3 FY26 topping estimates by 142.86%. Backlog: 600 MW leased tied to roughly $16 billion in prospective lease revenue. Post-earnings pattern: Average one-week gain of 11.13% even after weak day-of reactions. Bear Case GAAP losses widening: Q3 FY26 net loss of $100.9M. Leverage: $2.7B debt against $2.1B cash, plus ongoing capital raises. Concentration risk: Heavy reliance on CoreWeave and hyperscaler ramp timing. Skepticism: Shares down 35.23% over the past month. Watch the guide and CoreWeave commentary closely.

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Applied Digital reports fiscal Q4 2026 results with shares down 35.23% over the past month. Options markets are pricing in a sizable 13.72% post-earnings move, while a 0.43 put/call ratio signals traders remain tilted toward upside bets.

The central question is whether Applied Digital can convert its $16 billion contracted backlog and 1-gigawatt pipeline into a repeatable earnings engine before its capital requirements become a bigger concern. Investors will be watching for the ChronoScale/EKSO spin-off closing, progress on the HPC ramp, and any update on the company’s exposure to CoreWeave.

Wall Street remains firmly bullish, with 11 buy ratings and an average price target of $73.05 vs the stock’s current price of $26.13. That optimism leaves Applied Digital little room for delays, dilution, or margin pressure as enthusiasm surrounding the broader AI infrastructure trade cools.

Applied Digital (NASDAQ:APLD) is expected to report fiscal Q4 2026 results tonight at 4:05 PM ET after the bell. This earnings report closes a year where the stock rose 142.77% but recently reversed sharply.

From Contract Wins to a Sharp Reset Shares last traded at $26.09, down from $41.98 a month ago after dilution and financing news reset sentiment. Q3 FY26 delivered adjusted EPS of $0.09 against a -$0.21 consensus and revenue of $126.64 million, resulting in a 61.37% beat.

Adjusted EBITDA scaled to $44.14 million from $6.26 million a year earlier, though the GAAP net loss widened to $100.9 million on stock-based comp and reclassification charges. Management reiterated confidence in exceeding $1 billion in NOI within five years.

Consensus Estimates Metric Q4 FY26 Estimate Prior Q4 FY25 Actual Revenue $95.32M $38.01M EPS (Normalized) -$0.19 -$0.12 The Street models a step-down in sequential revenue from Q3’s $126.64M as one-time tenant fit-out revenue rolls off. EPS reverts to a loss, reflecting scaling SG&A (up 251% YoY) and interest on the $2.15 billion 6.750% Senior Secured Notes.

What I’ll Be Watching: Capacity, Concentration, and the Spin Tonight, I’ll be watching whether the second 150 MW building at Polaris Forge 1 is on track for its calendar 2026 timeline, since CEO Wes Cummins framed the current 100 MW as only “one-sixth of our contracted capacity and one-tenth of what is operating or under construction.”

Investors will also focus on progress toward the ChronoScale Corporation spin-off via the EKSO Bionics combination, slated to close this quarter. Any timing slip changes the segment reporting picture and the remaining GAAP drag from Cloud Services.

Customer concentration remains one of the biggest overhangs. HPC Hosting rests heavily on CoreWeave, and Nvidia reportedly exited its equity stake on July 17, 2026. Analysts will be looking for commentary on the Polaris Forge 3 430 MW project with MDU Resources and the 200 MW investment-grade hyperscaler at Polaris Forge 2.

Right now, the company’s balance sheet sits at $2.7 billion in debt against $2.1 billion in cash, with capex escalating across four sites.

Earnings History Quarter EPS Surprise Day-of Move 1-Week Move 30-Day Move Q3 FY26 +142.86% -7.99% +17.68% +74.38% Q2 FY26 +46.78% +8.05% +10.27% +17.31% Q1 FY26 +29.03% +16.05% +0.74% -15.95% Q4 FY25 +26.15% +31.01% +8.37% +16.13% On average, shares moved 11.13% one week after earnings over the past year.

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Contact [email protected] for any questions or corrections.

DALLAS, July 27, 2026 (GLOBE NEWSWIRE) -- Applied Digital Corporation (Nasdaq: APLD) ("Applied Digital" or the Company"), a U.S.-based designer, developer, owner, and operator of large-scale, purpose-built data centers engineered to support high-performance computing (“HPC”) workloads, including artificial intelligence (“AI”), machine learning, and other accelerated-compute applications, reported financial results for the fiscal fourth quarter ended May 31, 2026. The Company also provided operational updates.

During the quarter, the Company completed the separation of its Cloud Services Business in a series of transactions that resulted in the Company owning approximately 96% of the issued and outstanding equity of ChronoScale Holdings Corporation, f/k/a ChronoScale Corporation ("ChronoScale") as of the end of the fiscal year. ChronoScale, a public company, owns and operates our historic cloud services business and is consolidated into our financial statements, but excluded from the non-GAAP financial measures set forth below. Unless otherwise specified, disclosures in this earnings release, including the below, reflect continuing operations only.

Fiscal Fourth Quarter 2026 Financial Highlights

Revenues: $258.7 million, up 407% from the prior year comparable periodNet loss attributable to common stockholders: $110.6 million, down 108% from the prior year comparable periodNet loss attributable to common stockholders per basic and diluted share: $0.39, up 63% from the prior year comparable periodAdjusted revenue: $240.4 millionAdjusted net income: $12.9 millionAdjusted net income per diluted share: $0.04Adjusted EBITDA: $42.4 millionNet Operating Income: $39.9 million Fiscal Year 2026 Financial Highlights

Revenues: $611.3 million, up 167% from the prior year comparable periodNet loss attributable to common stockholders: $249.2 million, down 7% from the prior year comparable periodNet loss attributable to common stockholders per basic and diluted share: $0.91, down 22% from the prior year comparable periodAdjusted revenue: $539.7 millionAdjusted net income: $36.1 millionAdjusted net income per diluted share: $0.11Adjusted EBITDA: $107.2 millionNet Operating Income: $90.4 million Adjusted revenue, Adjusted net income (loss), Adjusted net income (loss) per diluted share, Adjusted EBITDA, and Net Operating Income are non-GAAP measures. A reconciliation of each of these Non-GAAP Measures to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States (“GAAP”) is set forth below. These non-GAAP measures exclude the results of ChronoScale. See “Reconciliation of GAAP to Non-GAAP Measures.”

Recent Highlights

Signed a 15-year take-or-pay lease with a new U.S. based, high investment-grade hyperscaler for 300 megawatts ("MW") of critical IT load at Delta Forge 1, a new AI Factory campus in Boyce, Louisiana. The lease provides for approximately $7.5 billion in base-term contracted revenue, with initial operations expected to commence calendar year 2027.Signed a second 15-year take-or-pay lease with the same high investment-grade hyperscaler for 300 MW at Polaris Forge 3, which provides for approximately $7.5 billion in base-term contracted revenue, with initial operations expected to commence during calendar year 2027.Completed a $2.15 billion private offering of 6.750% Senior Secured Notes due 2031 (issued at 98% of par) through its subsidiary APLD ComputeCo 2 LLC. Proceeds will fund development of 200 MW of critical IT load at Polaris Forge 2 in Harwood, North Dakota.Closed a revolving credit facility of up to $550 million ($350 million committed + $200 million accordion), arranged by Goldman Sachs and maturing in May 2029, to support pre- and post-lease development across campuses.Enhanced credit quality on existing CoreWeave leases through a restructured SPV subsidiary, unconditional springing guarantees from CoreWeave, Inc., and a $50 million letter of credit. These changes followed CoreWeave’s investment-grade A3-rated refinancing and provide additional security for the Company’s 9.250% Senior Secured Notes due 2030.Closed a $300 million senior secured bridge facility led by Goldman Sachs to support development of the fourth building (150 MW) at Polaris Forge 1 (which has been repaid with the proceeds from the Senior Secured Notes Offering described below).Completed the separation of our cloud services business, combining it with Ekso Bionics Holdings, Inc. to form ChronoScale (Nasdaq: CHRN), an independent publicly traded accelerated-compute platform. Applied Digital currently owns approximately 96% of ChronoScale.
Subsequent to the Quarter

Signed a third 15-year take-or-pay lease with the same high investment-grade hyperscaler for 210 MW at Delta Forge 2 (fifth AI Factory campus, third consecutive with this customer) in a new southern state. The lease provides for approximately $5.2 billion in base-term contracted revenue, with initial operations expected in the first half of calendar 2028.Entered a Memorandum of Understanding with CoreWeave to assign the Building 4 lease at Polaris Forge 1 to a CoreWeave subsidiary upon achieving an investment-grade credit rating.Closed $1.59 billion of 7.000% Senior Secured Notes due 2031 (issued at par) through our subsidiary APLD ComputeCo 3 LLC. Proceeds from this offering were used to repay the $300 million bridge facility and will fund the construction of the fourth building (150 MW), at Polaris Forge 1.Upsized the revolving credit facility, bringing the total committed amount to $430 million, with an additional $120 million accordion remaining.Achieved Ready for Service for Phase 1 of Building 2 (75 MW) at Polaris Forge 1 on schedule, bringing total live capacity at the campus to 175 MW.
Management Commentary

This was a defining quarter for Applied Digital, capping a defining year. Since the end of last quarter, we have signed three new leases — at Delta Forge 1, Polaris Forge 3, and Delta Forge 2 — all with the same high investment-grade hyperscaler and each in a different state. Delta Forge 1 and Polaris Forge 3 each provides for approximately $7.5 billion in base-term contracted lease revenue, while Delta Forge 2 adds approximately $5.2 billion. Together, these deals represent roughly $20 billion in long-term contracted revenue from a single, world-class customer that has now chosen us three times in a row.

With these agreements, we have secured 1.4 gigawatts ("GW") of contracted critical IT load, representing approximately $36 billion in total contracted lease revenue — or approximately $86 billion if all renewal options are exercised. We are building five multibillion-dollar AI Factory campuses for two hyperscalers and CoreWeave— a scale that we believe speaks to both the quality of our platform and the trust these customers place in our ability to execute.

“Nearly three years ago, we made a deliberate decision to build a company that scales, not just a company that builds data centers,” said Wes Cummins, Chairman and Chief Executive Officer of Applied Digital. “We call it our franchise model — a core team of design, construction, and operations professionals replicated across every campus, in each market. Combined with our proven supply chain and design approvals from every major hyperscaler, we believe this repeatable, differentiated platform is why we have emerged as one of the clear leaders in AI infrastructure.”

“We believe delivering on time is a genuine differentiator in this industry,” Cummins continued. “We brought Polaris Forge 1’s first 100 MW online on schedule and have now scaled total live capacity at the campus to 175 MW. We’re not just securing power — we’re turning it into operational AI capacity.”

Beyond the contracted portfolio and the approximately 1.4 GW already under construction, Applied Digital is actively marketing an additional 1.7 GW of capacity across multiple states, we see as underscoring robust demand for its AI Factories.

To fuel sustainable expansion, the Company is advancing a strategic power initiative. Applied Digital is working with Base Electron Corp., an independent power producer who has engaged Babcock & Wilcox to develop approximately 1.2 GW of front-of-the-meter natural gas-fired generation in the Dakotas, in collaboration with regional utilities. Applied Digital shareholders own approximately 10% of Base Electron Corp. through our investment in Base Electron. This deepens access to abundant, reliable, low-cost power — a critical competitive advantage for both existing campuses and future growth.

“We are still in the early innings of what we believe will likely be the largest buildout of critical infrastructure in modern economic history,” Cummins added. “We see demand for high-power-density, purpose-built AI data centers remaining extremely robust. Our approach is simple: Do it the right way. For customers, that means delivering high-quality, GPU-ready facilities on time. For communities, it means creating lasting economic value. When we do right by both, our shareholders win over the long term.”

Cummins also pointed to the continued strength of the Company’s Data Center Hosting business: “Our Data Center Hosting business, which operates 286 MW for bitcoin mining across our two North Dakota sites, remains the highest return-on-assets business in the company. We are paid based on the data center capacity provided to our customer, so as long as they are mining, we are paid regardless of where the price of bitcoin trades — which makes this a steady, high-margin source of cash flow.”

The Company also completed the separation of its cloud services business during the quarter and currently owns approximately 96% of ChronoScale, a public company trading on Nasdaq under the symbol “CHRN.” ChronoScale has continued to build out its leadership team, including the appointments of Raj Jegannathan, previously a Vice President at Tesla, as Chief Technology Officer, and Lawrence Lam, who brings more than twenty years scaling global cloud and AI platforms at companies including Supermicro, as Chief Product Officer.

HPC Hosting Update

Applied Digital's HPC Hosting Business designs, builds, and operates next-generation, purpose-built AI Factory data centers. As of May 31, 2026, the Company had executed long-term leases representing approximately 1,410 MW of contracted critical IT load across five campuses — Polaris Forge 1, 2, and 3 in North Dakota and Delta Forge 1 and 2 in Louisiana and another southern state — representing approximately $36 billion of total contracted revenue over the initial 15-year base lease terms, or approximately $86 billion if all renewal options are exercised.

The first 100 MW data center at Polaris Forge 1 became operational in October 2025, and the Company delivered Phase 1 of Building 2 (75 MW) on June 30, 2026, bringing the total live capacity at the campus to 175 MW. Additional buildings at Polaris Forge 1, along with Polaris Forge 2, Polaris Forge 3, Delta Forge 1, and Delta Forge 2, are in various stages of construction.

Revenue from our HPC Hosting business totaled $203.0 million for the quarter, including $44.1 million related to base rent, $152.4 million related to tenant fit-out services, and $6.5 million related to tenant recoveries. This resulted in $26.2 million of segment operating profit for the quarter ended May 31, 2026.

Data Center Hosting Update

Applied Digital’s Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. As of May 31, 2026, the Company’s 106 MW facility in Jamestown, ND, and 180 MW facility in Ellendale, ND, were operating at full capacity.

During the three months ended May 31, 2026, the Company generated $37.3 million in revenue from the Data Center Hosting Business segment, compared to $38.0 million during the three months ended May 31, 2025. The results were materially consistent year over year due to stable operating conditions across the Company’s data center hosting facilities.

We are very pleased with our Data Center Hosting Business, which generated $12.5 million in segment operating profit for the three months ended May 31, 2026 on $113.8 million in reported assets at the end of the period.

Cloud Services Business Update

On May 5, 2026, we completed the separation of our cloud services business, combining it with Ekso Bionics Holdings, Inc. to form ChronoScale Holdings Corporation, an independent, publicly traded accelerated-compute platform that is trading on the Nasdaq Capital Market under the symbol "CHRN." Applied Digital currently owns approximately 96% of ChronoScale.

We consider the Data Center Hosting Business and the HPC Hosting Business to represent our core operations for long-run strategic and performance evaluation purposes as we evolve into a pure-play data center platform moving forward. Accordingly, although we consolidate ChronoScale’s financial results as our majority owned subsidiary, we excluded the results of ChronoScale, including its cloud services business, in our Non-GAAP results presented herein. See “Reconciliation of GAAP to Non-GAAP Measures.”

Financial Results from Operations for Fiscal Fourth Quarter 2026

Operating Results

Services revenue in the fiscal fourth quarter 2026 was $208.2 million compared to $51.1 million, up 308% from the fiscal fourth quarter 2025. The growth was primarily driven by revenue of approximately $152.4 million related to tenant fit-out services within our HPC Hosting Business, which we began providing during the fiscal year ended 2026.

Data center rental and other revenue in the fiscal fourth quarter 2026 was $50.6 million as the first HPC data center at our Polaris Forge 1 campus was fully operating during the current quarter. This revenue consisted of $44.1 million related to base rent, and $6.5 million related to tenant recoveries.

Services cost of revenues in the fiscal fourth quarter 2026 were $193.1 million compared to $54.2 million, up 256% from the fiscal fourth quarter 2025. This increase was primarily driven by an increase of $145.6 million in expenses associated with tenant fit-out services for our HPC Hosting Business.

Data center rental and other cost of revenues in the fiscal fourth quarter 2026 were $25.1 million. Data center rental and other cost of revenue included approximately $14.1 million in depreciation and amortization expense on our first HPC data center at our Polaris Forge 1 campus, $6.4 million in expenses which are reimbursable as tenant recoveries, and $4.5 million in personnel and other expenses directly supporting revenue.

Selling, general and administrative expenses in the fiscal fourth quarter 2026 were $165.3 million compared to $41.0 million, up 303% from the fiscal fourth quarter of 2025 driven by the Company’s overall business growth. This increase was primarily due to increases of $116.8 million in stock based compensation due to accelerated vesting of certain employee stock awards as well as grant activity associated with separation of the cloud services business and the increase in headcount, $7.3 million in personnel expenses related to the increase in headcount, and $5.6 million in professional service expense primarily related to legal services provided on discrete transactions and projects, as well as general support of the business. These increases were partially offset by a decrease of $5.4 million in other selling, general, and administrative expense such as travel, computer and software expenses.

Interest expense, net in the fiscal fourth quarter 2026 was $10.6 million compared to $8.5 million, up 26%, from the fiscal fourth quarter 2025. As we entered into new debt arrangements during the current fiscal year, there was an increase of $31.9 million in interest expense. The increase in expense was partially offset by an increase of $30.5 million in interest income due to larger balances of funds held in interest-bearing demand deposit accounts.

Gain on change in fair value of derivatives was $53.3 million for the three months ended May 31, 2026, due to an increase of $69.9 million in the fair value of our Babcock & Wilcox Enterprises, Inc. (“B&W”) common stock warrant which was partially offset by a decrease of $16.7 million in the fair value of the derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2’s noncontrolling interest.

Gain on change in fair value of investment was $4.8 million for the three months ended May 31, 2026, due to the increase in the fair value of our investment in B&W common stock.

Net loss from discontinued operations was $1.0 million for the three months ended May 31, 2026 and represents the income statement activity related to the Ekso business at ChronoScale which was classified as held for sale and discontinued operations during the fiscal fourth quarter 2026.

Net loss from continuing operations attributable to common stockholders for the fiscal fourth quarter 2026 was $110.6 million, or $0.39 per basic and diluted share. This compares to a net loss attributable to common stockholders from continuing operations of $53.1 million, or $0.24 per basic and diluted share for the fiscal fourth quarter of 2025.

Adjusted revenue, a non-GAAP financial measure, was $240.4 million for the fiscal fourth quarter 2026 compared to $38.0 million for the fiscal fourth quarter of 2025.

Adjusted net income, a non-GAAP financial measure, was $12.9 million, or $0.04 per diluted share for the fiscal fourth quarter 2026. This compares to an adjusted net loss, a non-GAAP financial measure, of $7.6 million, or $0.03 per diluted share, for the fiscal fourth quarter of 2025.

Adjusted EBITDA, a non-GAAP financial measure, was $42.4 million for the fiscal fourth quarter 2026 compared to an Adjusted EBITDA of $1.0 million for the fiscal fourth quarter 2025.

Net Operating Income, a non-GAAP financial measure, was $39.9 million for the fiscal fourth quarter 2026.

Financial Results for Fiscal Year Ended May 31, 2026

Services revenue increased $270.0 million, or 119%, from $226.6 million for the fiscal year ended May 31, 2025 to $496.6 million for the fiscal year ended May 31, 2026. Our HPC Hosting Business commenced operations at our first HPC data center at our Polaris Forge 1 campus resulting in the recognition of approximately $270.6 million related to tenant fit-out services. Additionally, there was an increase of $12.1 million in revenue generated by our Data Center Hosting Business due to performance improvements compared to the fiscal year ended May 31, 2025. These increases were partially offset by a decrease of $12.4 million in revenue generated from ChronoScale primarily due to a reduction in rates for cloud services.

Data center rental and other revenue was $114.7 million for the fiscal year ended May 31, 2026, which is the period during which our HPC Hosting Business commenced operations. This revenue consisted of approximately $99.8 million related to base rent and $14.9 million related to tenant recoveries.

Services cost of revenues increased by $180.1 million, or 83%, from $216.8 million for the fiscal year ended May 31, 2025 to $396.9 million for the fiscal year ended May 31, 2026. The increase was primarily due to $258.1 million in expenses associated with tenant fit-out services for our HPC Hosting Business which we began providing during the current fiscal year. This increase was partially offset by decreases of approximately $62.3 million in depreciation and amortization expense and $17.2 million in lease and related expense primarily due to the renegotiations of certain of our leases during fiscal year ended May 31, 2026, as well as due to the Cloud Services Business (one of our three operating business segments at the time) being classified as held for sale until February 15, 2026, which resulted in decreased depreciation and amortization recorded.

Data center rental and other cost of revenue was $56.8 million for the fiscal year ended May 31, 2026, which is when we commenced our data center rental operations within our HPC Hosting Business. The primary components of data center rental and other cost of revenue include approximately $32.2 million in depreciation and amortization expenses associated with our HPC Hosting Business, $14.9 million in expenses which are reimbursable as tenant recoveries, $8.5 million in rental property operating expenses, which are not eligible for recovery from our tenant, $0.7 million in property insurance expenses associated with our HPC Hosting Business, and $0.2 million in property tax expenses associated with our HPC Hosting Business.

Selling, general and administrative expense increased by $224.2 million, or 208%, from $107.9 million for the fiscal year ended May 31, 2025 to $332.1 million for the fiscal year ended May 31, 2026. The increase was primarily due to the overall growth in the business, with a $198.3 million increase in stock-based compensation primarily due to an increase in grant activity related to the separation of the cloud services business, the increase in headcount and performance stock awards granted during the fiscal year ended May 31, 2026 compared to the fiscal year ended May 31, 2025, $16.0 million increase in professional service expenses primarily related to legal services provided on discrete transactions and projects as well as general support of the business, $15.4 million increase in personnel expenses driven by increases in headcount to support the business, and $6.2 million increase in other selling, general, and administrative expense primarily related to travel, computer and software expenses. These increases were partially offset by a decrease of $11.7 million in lease and related expenses and depreciation and amortization expense, primarily due to the renegotiations of certain of our leases during the fiscal year ended May 31, 2026.

Loss (gain) on classification of held for sale changed by $84.3 million, or 342%, from a gain of $24.6 million for the fiscal year ended May 31, 2025 to a loss of $59.7 million for the fiscal year ended May 31, 2026. The loss during the fiscal year ended May 31, 2026 was primarily due to the write down of the Cloud Services Business assets to carrying value as of February 15, 2026 when it no longer qualified as held for sale. Comparatively, the gain during the fiscal year ended May 31, 2025 was due to the sale of our former Garden City facility.

Interest expense, net decreased $2.6 million, or 8%, from $32.1 million for the fiscal year ended May 31, 2025 to $29.5 million for the fiscal year ended May 31, 2026. As we entered into more debt arrangements during the current fiscal year, there was an increase of $53.3 million in interest expense. The increase in expense was partially offset by an increase of $52.6 million in interest income due to larger balances of funds held in interest-bearing demand deposit accounts.

Gain on change in fair value of derivatives was $75.8 million for the fiscal year ended May 31, 2026, due to an increase of $89.2 million in fair value of our Babcock & Wilcox Enterprises, Inc. (“B&W”) common stock warrant partially offset by a decrease of $13.3 million in fair value of the derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2’s noncontrolling interest.

Gain on change in fair value of investments was $10.8 million for the fiscal year ended May 31, 2026, due to an increase of $8.8 million in fair value of our investment in B&W common stock and an increase of $2.0 million in fair value of our investment in Base Electron, a related party.

Loss on conversion of debt was $33.6 million for the fiscal year ended May 31, 2025, due to the difference in the fair value compared to the price at which the promissory notes, totaling $92.1 million, entered into with YA II PN, LTD in the year ended May 31, 2024 (the “YA Notes") were converted. There was no such loss recorded in the current fiscal year.

Loss on change in fair value of debt was $85.4 million for the fiscal year ended May 31, 2025, primarily due to a loss of approximately $89.6 million related to the change in fair value of the conversion option derivative of the Convertible Notes during the two week period in which we did not have sufficient authorized shares to settle such conversion fully in shares, which was partially offset by a gain of approximately $4.1 million related to the change in the fair value of the YA Notes.

Net loss from discontinued operations was $1.0 million for the fiscal year ended May 31, 2026 and represents the income statement activity related to the Legacy Ekso business at ChronoScale classified as held for sale and discontinued operations.

Net loss from continuing operations attributable to common stockholders was $249.2 million, or $0.91 per basic and diluted share, for the fiscal year ended May 31, 2026. This compares to a net loss attributable to common stockholders from continuing operations of $233.7 million, or $1.16 per basic and diluted share, for the fiscal year ended May 31, 2025.

Net loss from discontinued operations attributable to common stockholders for the fiscal year ended May 31, 2026 was $1.0 million. There was no such activity in the prior fiscal year.

Adjusted revenue, a non-GAAP financial measure, was $539.7 million for the fiscal year ended May 31, 2026 compared to $144.2 million for the fiscal year ended May 31, 2025.

Adjusted net income from continuing operations attributable to common stockholders, a non-GAAP financial measure, was $36.1 million or $0.11 per diluted share for the fiscal year ended May 31, 2026. This compares to an adjusted net loss attributable to common stockholders of $12.5 million, or $0.06 per basic and diluted share, for the fiscal year ended May 31, 2025.

Adjusted EBITDA, a non-GAAP financial measure, was $107.2 million for the fiscal year ended May 31, 2026 compared to an Adjusted EBITDA of $19.6 million for the fiscal year ended May 31, 2025.

Net Operating Income, a non-GAAP financial measure, was $90.4 million for the fiscal year ended May 31, 2026.

Balance Sheet

As of May 31, 2026, the Company had $4.2 billion in cash, cash equivalents, and restricted cash, along with $5.0 billion in debt.

Conference Call

As previously announced, Applied Digital will host a conference call today, July 27, 2026, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss these results. A question-and-answer session will follow the management’s presentation.

Date: Monday, July 27, 2026

Time: 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)

North America Dial-In: 1-833-461-5787

International Dial-In: +1 (585) 542-9983

Conference ID: 735983255

The conference call will be broadcast live and available for replay for one year here.

Please call the conference telephone number approximately 10 minutes before the start time. An operator will register your name and organization. If you have difficulty connecting with the conference call, please get in touch with Applied Digital’s investor relations team at 1-949-574-3860.

About Applied Digital

Applied Digital Corporation (Nasdaq: APLD) named Best Data Center in the Americas 2025 by Datacloud - designs, develops, owns, and operates large-scale, purpose-built data centers engineered to support HPC workloads, including AI, machine learning, and other accelerated-compute applications. Headquartered in Dallas, TX, and founded in 2021, the Company combines hyperscale expertise, closed-loop cooling, and rapid deployment capabilities to deliver secure, scalable compute at industry-leading speed and efficiency, while creating economic opportunities in underserved communities through its award-winning Polaris Forge AI Factory model. Find more information at www.applieddigital.com. Follow us on X (formerly Twitter) at @APLDdigital.

Forward-Looking Statements

This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position, business strategy and objectives and future financing plans. These statements use words, and variations of words, such as "intend," “will,” “continue,” “build,” “future,” “increase,” “drive,” “believe,” “look,” “ahead,” “confident,” “deliver,” “outlook,” “expect,” “project” and “predict.” Other examples of forward-looking statements may include, but are not limited to, (i) statements that reflect perspectives and expectations regarding lease agreements and any current or prospective data center campus development; (ii) statements about the high-performance computing (HPC) industry; (iii) statements of Company plans and objectives, including the Company’s evolving business model, or estimates or predictions of actions by suppliers; (iv) statements of future economic performance; (v) statements of assumptions underlying other statements and statements about the Company or its business; (vi) the Company’s plans to obtain future project financing; and (vii) statements regarding ChronoScale. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s expectations and projections. These risks, uncertainties, and other factors include, among others: our ability to complete construction of our data center campuses as planned; the lead time of customer acquisition and leasing decisions and related internal approval processes; changes to artificial intelligence and HPC infrastructure needs and their impact on future plans; costs related to the HPC operations and strategy; our ability to timely deliver any services required in connection with completion of installation under the lease agreements; our ability to raise additional capital to fund the ongoing datacenter construction and operations; our ability to obtain financing of datacenter leases on acceptable financing terms, or at all; our dependence on principal customers, including our ability to execute and perform our obligations under our leases with key customers; our ability to timely and successfully build new HPC hosting facilities with the appropriate contractual margins and efficiencies; power or other supply disruptions and equipment failures; the inability to comply with regulations, developments and changes in regulations; cash flow and access to capital; availability of financing to continue to grow our business; decline in demand for our products and services; maintenance of third party relationships; conditions in the debt and equity capital markets. A further list and description of these risks, uncertainties and other factors can be found in the Company’s most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, including in the sections captioned “Forward-Looking Statements” and “Risk Factors,” and in the Company’s subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, on the Company’s website (www.applieddigital.com) under “Investors,” or on request from the Company. Information in this earnings release is as of the dates and time periods indicated herein, and the Company does not undertake to update any of the information contained in these materials, except as required by law.

Use and Reconciliation of Non-GAAP Financial Measures

To supplement our consolidated financial statements presented under GAAP, we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations by providing perspective on results absent one-time or significant non-cash items. We utilize these measures in the business planning process to understand expected operating performance and to evaluate results against those expectations. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our core business operating results regarding factors and trends affecting our business and provide a reasonable basis for comparing our ongoing results of operations. Management considers the Data Center Hosting Business and the HPC Hosting Business to be its core operations for long-run strategic and performance evaluation purposes. Accordingly, these non-GAAP financial measures exclude the results of our consolidated subsidiary, ChronoScale. ChronoScale is included in our consolidated financial statements and results of continuing operations. Due to its strategic role relative to the Company’s core business, management believes the ChronoScale results may obscure underlying trends in the performance of core operations when included in certain non-GAAP measures.

These non-GAAP financial measures are provided as supplemental measures to our performance measures calculated in accordance with GAAP and therefore, are not intended to be considered in isolation or as a substitute for comparable GAAP measures. Excluding the results of ChronoScale in our non-GAAP financial measures removes revenues and expenses that are part of the Company’s consolidated results and continuing operations and should not be viewed as measures or reflections of liquidity or profitability in accordance with GAAP. Further, these non-GAAP financial measures have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Because of the non-standardized definitions of non-GAAP financial measures, we caution investors that the non-GAAP financial measures as used by us in this earnings release have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Further, investors should be aware that when evaluating these non-GAAP financial measures, these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, from time to time in the future there may be items that we may exclude for purposes of our non-GAAP financial measures and we may in the future cease to exclude items that we have historically excluded for purposes of our non-GAAP financial measures. Likewise, we may determine to modify the nature of the adjustments to arrive at our non-GAAP financial measures. Investors should review the non-GAAP reconciliations provided below and not rely on any single financial measure to evaluate our business.

Adjusted Revenue

“Adjusted revenue” is a non-GAAP financial measure that represents total revenue excluding ChronoScale revenue. Adjusted revenue is total revenue excluding total revenue from ChronoScale.

Adjusted Operating Income, Adjusted Net Income (Loss), and Adjusted Net Income (Loss) per Diluted Share

“Adjusted operating income” and “Adjusted net income (loss) from continuing operations attributable to common stockholders” are non-GAAP financial measures that represent operating income and net income (loss) from operations excluding ChronoScale, respectively. Adjusted operating income is Operating loss excluding operating loss from ChronoScale, stock-based compensation, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, loss on abandonment of assets, (gain) loss on classification of held for sale, accelerated depreciation and amortization, loss on legal settlement, restructuring expenses and other non-recurring expenses that management believes are not representative of our expected ongoing costs. Adjusted net income (loss) is Adjusted operating income further adjusted for interest expense directly attributable to ChronoScale, gain on change in fair value of derivatives, gain on change in fair value of investments, loss on conversion of debt, loss on change in fair value of debt, loss on change in fair value of related party debt, loss on change in fair value of warrants, loss on change in fair value of warrants issued to related parties, loss on extinguishment of debt and loss on extinguishment of related party debt. We define “Adjusted net income (loss) per diluted share” as Adjusted net income (loss) divided by weighted average diluted share count.

EBITDA and Adjusted EBITDA

“EBITDA” is defined as earnings before interest expense, net, income tax expense, and depreciation and amortization and excluding the results of ChronoScale. “Adjusted EBITDA” also excludes results of ChronoScale and is defined as EBITDA adjusted for stock-based compensation, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, (gain) loss on classification as held for sale, loss on abandonment of assets, gain on change in fair value of derivatives, gain on change in fair value of investments, loss on conversion of debt, loss on change in fair value of debt, loss on change in fair value of related party debt, loss on change in fair value of warrants, loss on change in fair value of warrants issued to related parties, loss on extinguishment of debt and loss on extinguishment of related party debt, loss on legal settlement, restructuring expenses, and other non-recurring expenses that management believes are not representative of our expected ongoing costs.

Net Operating Income

"Net Operating Income" is a non-GAAP financial measure that represents base rental revenue from the HPC Hosting Business. Net Operating Income is HPC Hosting Business base rental revenue less rental property operating expenses, property taxes, and property insurance expenses. "Net Operating Income Margin" is defined as Net Operating Income divided by HPC Hosting Business base rental revenue.

Investor Relations Contacts  Media Contact Matt Glover or Ralf Esper Buffy Harakidas, EVPGateway Group, Inc. JSA (Jaymie Scotto & Associates)(949) 574-3860 (856) [email protected] [email protected] APPLIED DIGITAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and par value data)
     May 31, 2026 May 31, 2025ASSETS   Current assets:   Cash and cash equivalents$1,591,988  $43,950 Restricted cash 2,381,027   72,368 Accounts receivable 56,309   6,830 Prepaid expenses and other current assets(1) 613,692   9,652 Current assets held for sale 19,841   — Total current assets 4,662,857   132,800 Property and equipment, net 4,236,300   1,252,287 Operating lease right of use assets, net 76,922   92,335 Finance lease right of use assets, net 122,523   213,315 Other assets 830,710   179,353 TOTAL ASSETS$9,929,312  $1,870,090     LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITYCurrent liabilities:   Accounts payable$395,474  $251,491 Accrued liabilities 548,493   30,121 Current portion of operating lease liability 18,484   16,785 Current portion of finance lease liability 47,585   147,040 Current portion of debt 16,422   10,331 Customer deposits 16,752   16,125 Deferred revenue 4,666   3,594 Current liabilities held for sale 7,426   — Due to customer 10,065   4,807 Other current liabilities 97,489   19,431 Total current liabilities 1,162,856   499,725 Long-term portion of operating lease liability 47,178   58,800 Long-term portion of finance lease liability 10,731   15 Long-term debt 4,959,516   677,825 Other long-term liabilities 5,454   — Total liabilities 6,185,735   1,236,365 Commitments and contingencies (Note 18)   Temporary equity   Series E preferred stock, $0.001 par value, 2,000,000 shares authorized, 301,673 shares issued and 276,673 outstanding at May 31, 2026, and 301,673 shares issued and outstanding at May 31, 2025 6,306   6,932 Series E-1 preferred stock, $0.001 par value, 62,500 shares authorized and issued and 61,909 shares outstanding at May 31, 2026, and 62,485 shares outstanding at May 31, 2025 56,460   57,011 Series G preferred stock, $0.001 par value, 1,030,000 shares authorized, no shares issued and outstanding at May 31, 2026, and 156,000 shares authorized, 78,000 shares issued and outstanding at May 31, 2025 —   72,094 Redeemable noncontrolling interest 1,956,303   — Stockholders' equity:   Common stock, $0.001 par value, 600,000,000 shares authorized, 295,048,903 shares issued and 287,883,603 shares outstanding at May 31, 2026, and 234,200,868 shares issued and 224,909,669 shares outstanding at May 31, 2025 296   230 Treasury stock, 7,165,300 shares at May 31, 2026 and 9,291,199 shares at May 31, 2025, at cost (52,737)  (31,400)Additional paid in capital 2,432,250   1,009,913 Accumulated deficit (662,333)  (481,055)Total stockholders’ equity attributable to Applied Digital Corporation 1,717,476   497,688 Noncontrolling interest 7,032   — Total stockholders' equity including noncontrolling interest 1,724,508   497,688 TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY$9,929,312  $1,870,090          (1) Includes a related party loan receivable of $58.6 million as of May 31, 2026.

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)      Three Months Ended  Fiscal Year Ended May 31, 2026 May 31, 2025  May 31, 2026 May 31, 2025Revenue:        Services revenue$208,190  $51,076   $496,609  $226,643 Data center rental and other revenue 50,558   —    114,702   — Related party revenue —   —    —   1,926 Total revenue 258,748   51,076    611,311   228,569 Costs and expenses:        Services cost of revenue 193,121   54,196    396,858   216,759 Data center rental and other cost of revenue 25,110   —    56,771   — Selling, general and administrative(1) 165,282   41,026    332,096   107,877 Loss (gain) on classification of held for sale(2) —   —    59,650   (24,616)Loss on abandonment of assets 55   (45)   2,398   724 Total costs and expenses 383,568   95,177    847,773   300,744 Operating loss (124,820)  (44,101)   (236,462)  (72,175)Interest expense, net(3) 10,633   8,451    29,516   32,139 Gain on change in fair value of derivatives (53,276)  —    (75,818)  — Gain on change in fair value of investments (4,768)  —    (10,840)  — Loss on conversion of debt —   —    —   33,612 Loss on change in fair value of debt —   —    —   85,439 Loss on extinguishment of debt —   —    —   1,177 Loss on change in fair value of warrants 2,212   —    2,212   6,421 Net loss from continuing operations before income tax expense (79,621)  (52,552)   (181,532)  (230,963)Income tax expense (benefit) 1,766   (16)   1,787   102 Net loss from continuing operations (81,387)  (52,536)   (183,319)  (231,065)Net loss from discontinued operations (1,020)  —    (1,020)  — Net loss (82,407)  (52,536)   (184,339)  (231,065)Net loss attributable to noncontrolling interest and redeemable noncontrolling interest (27,615)  —    (59,665)  — Preferred dividends (1,558)  (540)   (6,259)  (2,615)Net loss attributable to common stockholders$(111,580) $(53,076)  $(250,263) $(233,680)         Net loss attributable to common stockholders        Continuing operations$(110,560) $(53,076)  $(249,243) $(233,680)Discontinued operations (1,020)  —    (1,020)  — Net loss attributable to common stockholders$(111,580) $(53,076)  $(250,263) $(233,680)         Basic and diluted net loss per share attributable to common stockholders        Continuing operations$(0.39) $(0.24)  $(0.91) $(1.16)Discontinued operations —   —    —   — Basic and diluted net loss per share attributable to common stockholders$(0.39) $(0.24)  $(0.91) $(1.16)         Basic and diluted weighted average number of shares outstanding 285,651,622   222,454,578    275,194,755   201,194,451                   (1) Includes related party selling, general and administrative expense of $0.1 million for each of the three months ended May 31, 2026 and May 31, 2025, respectively, and $0.3 million for each of the fiscal years ended May 31, 2026 and May 31, 2025, respectively.

(2) For the fiscal year ended May 31, 2026, amount includes a loss on classification of held for sale of $59.7 million representing the write down of our cloud services business' (the "Cloud Services Business") assets to their carrying value as of February 15, 2026 when it no longer qualified as held for sale. For the fiscal year ended May 31, 2025, amount includes $25.0 million received in connection with the sale of our Garden City facility once conditional approval requirements were met and escrowed funds were released.

(3) For the three months and fiscal year ended May 31, 2026, amount includes related party income of $0.1 million.

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (In thousands)
   Fiscal Year Ended May 31, 2026 May 31, 2025CASH FLOW FROM OPERATING ACTIVITIES   Net loss$(184,339) $(231,065)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:   Depreciation and amortization 67,387   97,945 Stock-based compensation 220,135   22,704 Lease expense 10,106   31,661 Gain on change in fair value of derivatives (75,818)  — Gain on change in fair value of investments (10,840)  — Loss on extinguishment of debt —   1,177 Amortization of debt issuance costs 6,323   9,563 Loss (gain) on classification of held for sale 59,650   (24,616)Loss on conversion of debt —   33,612 Loss on change in fair value of debt —   85,439 Loss on change in fair value of warrants issued 2,212   6,421 Loss on abandonment of assets 2,398   1,138 Changes in operating assets and liabilities:   Accounts receivable (49,268)  (2,934)Prepaid expenses and other current assets (36,164)  (8,309)Other assets (51,483)  2,979 Customer deposits 627   2,306 Related party customer deposits —   (1,549)Deferred revenue 947   (34,080)Related party deferred revenue —   (1,692)Accounts payable (1,182)  (78,256)Accrued liabilities 106,223   (12,127)Due to customer 5,258   (8,195)Lease assets and liabilities 17,513   (7,524)CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES 89,685   (115,402)CASH FLOW USED IN INVESTING ACTIVITIES   Purchases of property and equipment and other assets (2,865,765)  (681,603)Proceeds from sale of investments 5,000   — Proceeds from sale of assets —   25,000 Finance lease prepayments —   (6,178)Loans to related parties (58,632)  — Purchases of investments (17,000)  (4,873)CASH FLOW USED IN INVESTING ACTIVITIES (2,936,397)  (667,654)CASH FLOW PROVIDED BY FINANCING ACTIVITIES   Repayment of finance leases (99,455)  (125,073)Borrowings of long-term debt 4,955,327   650,083 Repayment of long-term debt (521,512)  (293,045)Payment of deferred financing costs (171,885)  (42,398)Tax payments for restricted stock upon vesting (36,282)  (4,116)Proceeds from issuance of common stock 196,366   191,590 Common stock issuance costs (5,950)  (10,305)Proceeds from issuance of preferred stock 814,998   198,205 Preferred stock issuance costs (11,897)  (13,812)Redemption of preferred stock (1,187)  (2,615)Dividends issued on preferred stock (6,259)  — Issuance of warrants, at fair value (8,250)  — Exercise of warrants 6,265   — Issuance of warrants by subsidiary 4,451   — Proceeds from issuance of SAFE agreement included in long-term debt —   12,000 Repurchase of shares —   (31,342)Proceeds from convertible notes —   450,000 Purchase of capped call options —   (51,750)Purchase of prepaid forward contract —   (52,736)Redeemable noncontrolling interest contributions 1,825,000   — Redeemable noncontrolling interest issuance costs (62,904)  — CASH FLOW PROVIDED BY FINANCING ACTIVITIES$6,876,826  $874,686     NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH$4,030,114  $91,630 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD, INCLUDING CASH FROM DISCONTINUED OPERATIONS 123,318   31,688 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD, INCLUDING CASH FROM DISCONTINUED OPERATIONS 4,153,432   123,318 Less: CASH, CASH EQUIVALENTS, AND RESTRICTED CASH FROM DISCONTINUED OPERATIONS 2   — CASH, CASH EQUIVALENTS, AND RESTRICTED CASH FROM CONTINUED OPERATIONS$4,153,430  $123,318     SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION   Interest paid$263,402  $62,712 Income taxes paid$241  $105 SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES   Operating right-of-use assets obtained by lease obligation$—  $20,280 Finance right-of-use assets obtained by lease obligation$25,214  $113,674 Property and equipment in accounts payable and accrued liabilities$556,446  $246,472 Conversion of debt to common stock$—  $104,945 Conversion of preferred stock to common stock$875,185  $48,350 Consideration for guarantee of an affiliate's obligations$2,000  $— Issuance of warrants, at fair value$104,705  $136,292 Cashless exercise of warrants$1  $5 Non-cash dividends paid in-kind$62,726  $— Acquisition of ChronoScale$18,110  $—  APPLIED DIGITAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
(In thousands, except percentage data)      Three Months Ended  Fiscal Year Ended May 31, 2026 May 31, 2025  May 31, 2026 May 31, 2025Adjusted Revenue        Total revenue (GAAP)$258,748  $51,076   $611,311  $228,569 ChronoScale revenue (18,396)  (13,063)   (71,604)  (84,376)Adjusted revenue (Non-GAAP)$240,352  $38,013   $539,707  $144,193          Adjusted operating income (loss)        Operating loss (GAAP)$(124,820) $(44,101)  $(236,462) $(72,175)Operating loss from ChronoScale 12,118   23,402    37,043   55,331 Stock-based compensation 127,845   11,558    219,289   22,492 Non-recurring repair expenses(1) 41   —    322   173 Diligence, acquisition, disposition and integration expenses(2) 7,034   4,908    27,938   17,269 Litigation expenses(3) 307   48    1,179   1,389 Loss on abandonment of assets 55   369    1,799   1,138 Gain on classification of held for sale —   —    —   (24,616)Accelerated depreciation and amortization(4) —   —    —   45 Restructuring expenses(5) 377   668    1,469   711 Other non-recurring expenses(6) 1,224   69    5,219   627 Adjusted operating income (loss) (Non-GAAP)$24,181  $(3,079)  $57,796  $2,384 Adjusted operating margin 10% (8)%   11%  2%         Adjusted net income (loss) from continuing operations attributable to common stockholders        Net loss from continuing operations (GAAP)$(81,387) $(52,536)  $(183,319) $(231,065)Operating loss from ChronoScale 12,118   23,402    37,043   55,331 Interest expense directly attributed to ChronoScale 1,132   3,955    9,583   17,399 Stock-based compensation 127,845   11,558    219,289   22,492 Non-recurring repair expenses(1) 41   —    322   173 Diligence, acquisition, disposition and integration expenses(2) 7,034   4,908    27,938   17,269 Litigation expenses(3) 307   48    1,179   1,389 Loss on abandonment of assets 55   369    1,799   1,138 Gain on classification of held for sale —   —    —   (24,616)Accelerated depreciation and amortization(4) —   —    —   45 Gain on change in fair value of derivatives (53,276)  —    (75,818)  — Gain on change in fair value of investments (4,768)  —    (10,840)  — Loss on conversion of debt —   —    —   33,612 Loss on change in fair value of debt —   —    —   85,439 Loss on change in fair value of warrants 2,212   —    2,212   6,421 Loss on extinguishment of debt —   —    —   1,177 Restructuring expenses(5) 377   668    1,469   711 Other non-recurring expenses(6) 1,224   69    5,219   627 Adjusted net income (loss) from continuing operations (Non-GAAP)$12,914  $(7,559)  $36,076  $(12,458)Diluted weighted average number of shares outstanding (Non-GAAP)(7) 330,239,240   222,454,578    318,968,163   201,194,451 Adjusted net income (loss) from continuing operations per diluted share (Non-GAAP)$0.04  $(0.03)  $0.11  $(0.06)         EBITDA and Adjusted EBITDA        Net loss from continuing operations (GAAP)$(81,387) $(52,536)  $(183,319) $(231,065)Operating loss from ChronoScale 12,118   23,402    37,043   55,331 Interest expense, net 10,633   8,451    29,516   32,139 Income tax expense (benefit) 1,766   (16)   1,787   102 Depreciation and amortization(4) 18,170   4,059    49,433   17,289 EBITDA (Non-GAAP)$(38,700) $(16,640)  $(65,540) $(126,204)Stock-based compensation 127,845   11,558    219,289   22,492 Non-recurring repair expenses(1) 41   —    322   173 Diligence, acquisition, disposition and integration expenses(2) 7,034   4,908    27,938   17,269 Litigation expenses(3) 307   48    1,179   1,389 Gain on classification of held for sale —   —    —   (24,616)Loss on abandonment of assets 55   369    1,799   1,138 Gain on change in fair value of derivatives (53,276)  —    (75,818)  — Gain on change in fair value of investments (4,768)  —    (10,840)  — Loss on conversion of debt —   —    —   33,612 Loss on change in fair value of debt —   —    —   85,439 Loss on change in fair value of warrants 2,212   —    2,212   6,421 Restructuring expenses(5) 377   668    1,469   711 Other non-recurring expenses(6) 1,224   69    5,219   627 Adjusted EBITDA (Non-GAAP)$42,351  $980   $107,229  $19,628          Net Operating Income        HPC Hosting Business base rental revenue (GAAP)$44,062  $—   $99,811  $— Rental property operating expenses (3,382)  —    (8,545)  — Property taxes (198)  —    (198)  — Property insurance expenses (571)  —    (680)  — Net Operating Income (Non-GAAP)$39,911  $—   $90,388  $— Net Operating Income margin 91%  —%   91%  —% (1) Represents costs incurred for the non-recurring repair and replacement of equipment at our data center facilities.
(2) Represents legal, accounting and consulting costs incurred in association with certain discrete transactions and projects.
(3) Represents non-recurring litigation expense associated with our defense of class action lawsuits and legal fees related to matters with certain former employees. We do not expect to incur these expenses on a regular basis.
(4) Represents the acceleration of expense related to assets that were abandoned by us due to operational failure or other reasons. Depreciation and amortization in this amount is included in Depreciation and Amortization expense within our calculation of EBITDA, and therefore is not added back as a management adjustment in our calculation of Adjusted EBITDA.
(5) Represents non-recurring expenses associated with employee separations.
(6) Represents expenses that are not representative of our expected ongoing costs.
(7) Potentially dilutive securities or other contracts to issue common stock are only included for each period if the effect is dilutive to Adjusted net income (loss) from continuing operations per diluted share.

July 27 - Applied Digital (APLD.O), opens new tab beat Wall Street estimates for fourth-quarter revenue on Monday, riding on robust demand for its data ​centers from an expanding roster of AI clients.

Shares of ‌the company, which counts CoreWeave (CRWV.O), opens new tab as a client, rose 5.4% in extended trading. They have risen 7.6% this year, as of Monday's close.

Learn about the latest breakthroughs in AI and tech with the Reuters Artificial Intelligencer newsletter. Sign up here.

Applied ​Digital designs, builds and operates data centers and ​provides colocation services for artificial intelligence, networking and blockchain ⁠workloads.

The company has signed long-term colocation contracts with AI and ​networking customers racing to secure data-center capacity to power their ​models and services.

Here are some details:

The data center provider's revenue surged 407% to $258.7 million for the fourth quarter ended May 31, surpassing analysts' ​average estimate of $94.8 million, according to data compiled by LSEG.

Applied ​Digital reported per-share adjusted income of 4 cents, compared to a loss ‌of ⁠22 cents expected by analysts.

"We are still in the early innings of what we believe will likely be the largest buildout of critical infrastructure in modern economic history," CEO Wes ​Cummins said.

"We see ​demand for ⁠high-power-density, purpose-built AI data centers remaining extremely robust," Cummins added.

The company in June announced a 15-year ​lease with a U.S.-based hyperscaler at its Delta ​Forge ⁠2 site expected to generate $5.2 billion in revenue. That followed the $7.5 billion long-term deal signed in April with an unnamed hyperscaler ⁠at ​its Delta Forge 1 facility.

About 70% of ​contracted revenue is now backed by U.S.-based investment-grade hyperscalers, the company has ​said.

Reporting by Juby Babu in Mexico City; Editing by Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles., opens new tab

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Applied Digital (NASDAQ:APLD) is a rare AI infrastructure story that behaves like a landlord, benefiting from long-duration, contracted revenue streams while masquerading as a growth stock. The company develops and operates specialized data centers, making money by leasing computing capacity to AI and high-performance computing customers.

With $16 billion in aggregate prospective lease revenue already signed and 15-year hyperscaler leases underwriting the buildout, the buy case rests on the simple premise that buildings will open on schedule, which they are.

$16 Billion in Signed Lease Backlog Makes the Bull Case Polaris Forge 1 is 400 MW fully contracted to CoreWeave for roughly $11 billion in contracted revenue, and Polaris Forge 2 added a 200 MW lease with a U.S. investment-grade hyperscaler worth approximately $5 billion over its term.

Management has reiterated a target of $1 billion in NOI within five years. That is REIT-grade cash flow visibility attached to a pipeline of roughly 1 GW across four development sites.

Applied Digital’s Earnings Inflection Has Arrived Q3 FY2026 revenue hit $126.64 million, up 139.3% year over year, while adjusted EBITDA jumped to $44.14 million from $6.26 million a year earlier. Adjusted EPS came in at $0.09 against a -$0.21 consensus, the fourth straight beat. Analysts have followed with 11 buy ratings, zero holds, and zero sells, and a $76.70 target implying 154.99% upside from the current $30.08.

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Why Applied Digital Beats the Obvious AI Alternative The natural comparison is IREN (NASDAQ:IREN), the other pure-play AI/HPC data center peer transitioning from Bitcoin. IREN posted 0% quarterly revenue growth YoY at last report against APLD’s 139.3%. Over the last year, APLD returned 174.7% versus IREN’s 122.05%. For retirement money, growth backed by signed leases beats growth backed by GPU spot pricing.

The Two Biggest Risks Are Already Shrinking Yes, GAAP losses are real, and the company’s CoreWeave revenue concentration is real. However, the company has $1.73 billion in cash, attractive financing with a $2.15 billion senior secured notes offering at 6.750% to fund Polaris Forge 2, and a new investment-grade hyperscaler diversifying the customer base. Insiders have logged 12 recent buy transactions. The people closest to the numbers are adding, not trimming.

Retirement investors looking for multi-decade AI infrastructure exposure with contracted cash-flow visibility have a compelling case to research APLD today.

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Applied Digital shares are powering higher. Why are APLD shares rallying? Earnings Preview & HistoryApplied Digital is scheduled to report fourth-quarter earnings on July 27. The company is expected to report a loss of 36 cents per share along with revenue of $91.91 million. For the prior quarter, Applied Digital reported earnings per share of $0.09, beating the consensus estimate of a loss of 17 cents per share. The company also posted revenue of $126.60 million, exceeding the consensus estimate of $77.11 million.

Applied Digital has beaten EPS estimates in seven consecutive quarters. Over the last four quarters, the company has averaged an EPS surprise of 1.03% and a revenue surprise of 0.44%.

Applied Digital Eyes $1B NOI in 5 YearsOversold, But Not Out Of The WoodsThe chart is still in a clear downtrend on intermediate timeframes, with the stock trading 22.9% below its 20-day SMA, 33.2% below its 50-day SMA, and 17.4% below its 200-day SMA. That distance from the major averages tells you rallies are still fighting overhead supply, even if the premarket bounce extends.

Momentum is the main story right now: RSI is 26.30, which puts the stock in oversold territory and signals the selling has become stretched. In plain terms, RSI helps gauge whether a move has gone "too far, too fast," and readings below 30 often coincide with tradable bounces—but they don’t, by themselves, confirm a durable bottom.

From a structure standpoint, May marked the recent swing high (and the 52-week high), while July logged a swing low as RSI slipped into oversold territory. Longer-term, the 50-day SMA remains above the 200-day SMA (a constructive longer-term backdrop), but the 20-day SMA sitting below the 50-day SMA keeps the near-term trend bearish until price can reclaim key moving-average zones.

Key Resistance: $29.00 — a nearby round-number area where rebounds can stall, especially with multiple moving averages still overhead Key Support: $24.00 — a nearby level that lines up as a recent "line in the sand" for buyers after the latest selloff Benzinga Edge RankingsBelow is the Benzinga Edge scorecard for Applied Digital, highlighting its strengths and weaknesses compared to the broader market:

Momentum: Bullish (Score: 82.08) — Despite the recent drawdown, the stock’s longer-term performance profile still screens as strong versus the broader market. The Verdict: Applied Digital’s Benzinga Edge signal reveals a momentum-driven profile, with Momentum as the clear standout in the current dataset. For traders, that puts extra emphasis on whether this oversold bounce can build into a trend reversal—or fades as price runs into overhead resistance near $29.00.

Applied Digital Shares Edge HigherAPLD Price Action: At the time of publication, Applied Digital shares are trading 4.61% higher at $26.98, according to data from Benzinga Pro.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Applied Digital (APLD 5.37%) just added more operational AI capacity at Polaris Forge 1, giving investors a fresh data point on its repeatable growth model. The opportunity is clear: turn raw power into leased AI infrastructure. But the stock's valuation means execution needs to keep matching expectations.

Stock prices used were the market prices of July 8, 2026. The video was published on July 16, 2026.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Applied Digital announced that it will host a conference call on Monday, July 27, to discuss its operations and financial results for the fiscal fourth quarter.

Cramer recommended buying Bloom Energy Corporation (NYSE:BE) as it has “come down a great deal and it’s a non-combustible way to be able to power data centers.”

Truist Securities analyst Christopher Souther, on Tuesday, initiated coverage on Bloom Energy with a Hold rating and announced a price target of $250.

“I think double down right now. A 6% yield. You want to own it. I think it’s terrific for people who want fixed income,” Cramer said when asked about Enterprise Products Partners L.P. (NYSE:EPD).

On July 9, JP Morgan analyst Jeremy Tonet maintained EPD at Neutral and raised the price target from $41 to $42.

Citigroup analyst Anthony Pettinari, on Wednesday, maintained Lennar with a Neutral rating and lowered the price target from $104 to $88.

X-Energy, Inc. (NASDAQ:XEG) is a “pure spec,” Cramer said. “It’s nuclear, and the problem with nuclear is everyone’s just decided it’s just too darn expensive.”

On the earnings front, X-Energy reported worse-than-expected first-quarter sales on June 4.

Construction Partners announced that it will release its fiscal third-quarter results on Aug. 7, before the market opens.

Price Action:

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Applied Digital receives a Buy rating, driven by robust triple-digit revenue growth and strong future demand signals. APLD is positioned as a significant beneficiary in the data center market, which may still be in its early innings. Despite substantial appreciation and not being the cheapest data center play, I see no structural concerns undermining the bullish thesis.

Key Takeaways APLD derives nearly 86% of contracted lease revenues from just two hyperscale customers. Applied Digital has about $36B in contracted leases, with most tied to existing hyperscale relationships. APLD faces diversified rivals EQIX and DLR, while customer concentration heightens execution risk. Applied Digital (APLD - Free Report) continues to expand its artificial intelligence data center platform aggressively, but its persistently high customer concentration remains an important investment risk. Although the company has built a sizable portfolio of long-term hyperscale leases, future revenue generation remains heavily dependent on a limited number of counterparties, tying growth closely to the investment priorities and financial health of a few large customers.

The exposure remains substantial. Applied Digital has approximately $36 billion in contracted lease revenues, with nearly $20 billion associated with one hyperscaler across Delta Forge 1, Polaris Forge 3 and Delta Forge 2. CoreWeave represents another $11 billion through Polaris Forge 1, while a third hyperscaler at Polaris Forge 2 accounts for the remaining $5 billion. Consequently, nearly 86% of the company's contracted revenues are derived from just two customers, highlighting the limited diversification of its revenue pipeline.

This dependence increases execution risk as multiple AI data center campuses are scheduled to become operational through 2027 and 2028. Any delay in capacity deployments, moderation in AI infrastructure investments or deterioration in the credit profile of these key tenants could materially affect future revenue generation. While Applied Digital continues to expand its development pipeline, much of the incremental contracted capacity remains tied to existing hyperscale relationships instead of materially broadening its customer mix.

With the bulk of contracted revenues still resting on just two hyperscalers and little evidence of a broader tenant base taking shape, APLD's customer concentration is likely to remain a defining constraint on the sustainability of its growth trajectory.

APLD Faces Stiff CompetitionApplied Digital faces intense competition from Equinix (EQIX - Free Report) and Digital Realty Trust (DLR - Free Report) , both of which operate with significantly more diversified customer portfolios.

Equinix generates revenues from a broad base of enterprise, cloud and network customers across global markets, while Digital Realty Trust serves a balanced mix of hyperscalers, enterprises and colocation customers. In comparison, Applied Digital remains heavily reliant on a limited number of hyperscale tenants for the bulk of its contracted lease revenues.

Unlike Equinix and Digital Realty Trust, Applied Digital's elevated customer concentration increases its exposure to customer-specific investment decisions and execution risks, potentially making its long-term revenue stream more volatile.

APLD’s Share Price Performance, Valuation & EstimatesApplied Digital shares have returned 31.7% year to date, while the broader Zacks Finance sector has appreciated 4.6% and the Zacks Financial-Miscellaneous Services industry has plunged 12.5%.

APLD Stock’s Performance
Image Source: Zacks Investment Research

Applied Digital stock is trading at a forward 12-month price/sales of 13.14X compared with the broader sector’s 8.97X. APLD has a Value Score of F.

APLD’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for fiscal 2026 loss is pegged at 70 cents per share. Applied Digital reported a loss of 80 cents per share in the previous year.