Applied Digital Posted a Solid Quarter and the Stock Is Moving Higher. What to Expect Next.
Businessman pointing arrow graph corporate future growth by Marchmeena29 via iStock Applied Digital Corporation (APLD) just put up a strong set of numbers this earnings season. In its fiscal fourth quarter of 2026, the Dallas-based data center company reported $258.7 million in revenue, far ahead of Wall Street estimates of about $94.8 million to $104.3 million.…
Businessman pointing arrow graph corporate future growth by Marchmeena29 via iStock
Applied Digital Corporation (APLD) just put up a strong set of numbers this earnings season. In its fiscal fourth quarter of 2026, the Dallas-based data center company reported $258.7 million in revenue, far ahead of Wall Street estimates of about $94.8 million to $104.3 million. It also posted adjusted earnings of $0.04 per share, beating expectations for a loss of roughly $0.19 to $0.22.
The stock reacted quickly, with shares of Applied Digital rising about 4% in premarket trading. Investors are still leaning into the company’s growing AI data center business, especially as demand for AI infrastructure keeps climbing. Hyperscalers are expected to spend over $600 billion this year alone, even with ongoing challenges around power and funding.
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With Applied Digital delivering a big revenue beat and showing early signs of profitability, is there more upside ahead?
Breaking Down The Financial Performance
Applied Digital builds and runs data centers designed for AI and high-performance computing, then leases that capacity to large customers. The stock has had a strong run, up 175.4% over the past year, and it is up 12.64% so far in 2026.
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In the fiscal fourth quarter, revenue jumped to $258.7 million, up 407% from a year ago, showing the rapid speed in which demand is growing. The company still posted a net loss of $110.6 million, but that loss narrowed, and the underlying numbers are starting to look better. Adjusted revenue came in at $240.4 million, with adjusted net income of $12.9 million and adjusted EBITDA of $42.4 million. Net operating income was $39.9 million, pointing to better efficiency as more capacity comes online.
For the full fiscal year 2026, revenue reached $611.3 million, up 167% year-over-year (YOY). Adjusted EBITDA rose to $107.2 million, while adjusted net income came in at $36.1 million, showing steady progress as the business scales.
Core Drivers Behind Future Growth
Applied Digital signed a power agreement with Montana-Dakota Utilities Company, a subsidiary of MDU Resources Group (MDU) , to support its Polaris Forge 3 AI data center in North Dakota. The site is expected to use up to 430 megawatts at full capacity. Applied Digital will handle sourcing the power, giving it more control as it scales. The project is set to begin operations in August 2027 and builds on its existing presence in the state, where Polaris Forge 1 is already running.
Also, the company locked in a 210 MW long-term lease at its Delta Forge 2 site with a United States-based investment-grade hyperscaler. The deal runs for 15 years and is structured as take-or-pay, bringing in about $5.2 billion in base revenue, with the potential to reach $12.7 billion if extended. This pushes its total contracted capacity to 1.4 GW and about $36 billion in base-term revenue, with roughly 70% tied to investment-grade customers.
At Delta Forge 1, Applied Digital added another hyperscaler tenant under a 15-year lease covering 300 MW, worth around $7.5 billion. This takes total contracted revenue to over $23 billion and increases the share backed by investment-grade clients to more than 50%, while also expanding its customer mix.
Analyst Sentiment Turns Positive
Applied Digital is set to report its next earnings on October 8. For the current quarter (August 2026), analysts expect a loss of $0.20 per share, compared to $0.11 a year ago, an 81.82% drop. For fiscal 2027, estimates point to a loss of $1.10 versus $0.91 previously, a 20.88% decline.
Needham kept its “Buy” rating and held a Street-high $83 price target, with analyst John Todaro pointing to an extra 150 megawatts of near-term expansion at the Delta Forge site as a reason to raise estimates. H.C. Wainwright also maintained a “Buy” rating, though with a lower $40 target, noting strong revenue growth even as profits are still developing.
Overall, sentiment is clearly bullish. All 13 analysts covering Applied Digital Corporation rate it a consensus “Strong Buy”, with an average price target of $72.54. From current levels, that suggests about 160.1% upside.
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Conclusion
Applied Digital’s latest results and expanding backlog make a strong case that the story still has room to run, but it is not without execution risk. The combination of explosive revenue growth, long-term hyperscaler contracts, and clear analyst backing suggests the rally is supported by fundamentals rather than just hype. Nevertheless, near-term losses and the capital-heavy buildout mean volatility is likely to stick around. From here, the path of least resistance still looks higher as more capacity comes online and contracts convert into revenue, but pullbacks along the way would not be surprising.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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