Applied Digital (APLD) Shares Jump 10% on Strong Q3 Earnings and AI Factory Expansion

Quick overview

Shares of Applied Digital Corporation (Nasdaq: APLD) surged 10.37% to end at $27.79 on Wednesday after the business released fiscal third-quarter results that exceeded Wall Street forecasts. The company’s successful ramp-up of its high-performance computing (HPC) and artificial intelligence (AI) data center operations in North Dakota drove a staggering 139% year-over-year revenue gain.

AI Data Centers Drive Inflection Point Earnings

Applied Digital reported revenue of $126.6 million for the quarter that concluded on February 28, 2026, far more than the $75.5 million analyst consensus. The company’s HPC Hosting Business, which brought in $71.0 million at that time, was the main driver of the expansion.

The company’s first 100 MW direct-to-chip liquid-cooled data center at the Polaris Forge 1 complex became fully operational, marking a significant milestone. Investors were given a preview of the annuity-style revenue streams the company hopes to develop with hyperscale tenants thanks to this one facility’s $44.1 million base rent contribution.

Scaling Applied Digital’s AI Factory Blueprint

In response to what CEO Wes Cummins called “aggressive” demand from hyperscalers, whose yearly capital expenditures are now close to $700 billion, Applied Digital is rapidly growing its presence.

Delta Forge 1: In the southern United States, the corporation has started construction of a gigantic 430 MW AI Factory facility. Initial activities are anticipated by mid-2027 and will cover more than 500 acres.

Polaris Forge 2: With a 15-year lease and an investment-grade hyperscaler, construction is underway on a 200 MW complex in Harwood, ND.

Financing Power: To finance the Polaris Forge 2 build-out, the business completed a $2.15 billion private issuing of senior secured notes after the quarter.

Strategic Shift: Pure-Play Data Center Platform

To concentrate on its core infrastructural assets, the corporation is presently undergoing a structural transformation. This includes the planned merger of its Cloud Services division with EKSO Bionics to become ChronoScale Corporation (CHRN). In order to enable the data center and cloud companies to grow independently, Applied Digital plans to keep a 97% share in the new company.

With a segment operating profit of about $14 million and $37.5 million in revenue this quarter, its historical Data Center Hosting (Bitcoin mining) business is still a cash cow.

The Valuation Debate for Applied Digital Stock: Growth vs. Debt

The company’s GAAP net loss increased to $100.9 million despite the “blowout” results, mostly as a result of accelerated stock-based compensation and a $59.7 million write-down associated with the reclassification of its cloud business.

Regarding the long-term course of the stock, investors are still divided. Although conservative analysts highlight the company’s $2.7 billion debt load and the high capital intensity of its “AI Factory” roll-out, Simply Wall St. forecasts a possible fair value of $45.27 (a 63% upside). The market is currently placing a lot of bets on Cummins’ theory that the most profitable trade in the contemporary tech economy is converting enormous power capacity into operational AI infrastructure.

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Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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