Can Applied Digital's AI Infrastructure Push Fuel Revenue Growth?

Applied Digital APLD is positioning itself as a critical infrastructure provider for the AI revolution, leaning on purpose-built data centers designed specifically for high-performance computing workloads. This strategic pivot reflects a calculated bet that demand for AI-optimized facilities will outpace traditional data center capacity, creating opportunity for specialized builders capable of delivering power-dense, liquid-cooled infrastructure at scale.APLD’s AI infrastructure thesis centers on technical differentiation. Its proprietary closed-loop, direct-to-chip liquid cooling system achieves a projected power usage effectiveness of 1.18 with near-zero water consumption, addressing two critical constraints for hyperscalers: energy efficiency and environmental sustainability. With over 200 days of natural cooling annually in North Dakota locations, Applied Digital offers operational cost advantages that could translate into meaningful savings for AI training and inference workloads.The expansion of Polaris Forge 1 to 400 megawatts (MW) of fully contracted capacity, representing approximately $11 billion in lease value, validates the market's appetite for this specialized infrastructure. Construction of Polaris Forge 2 further demonstrates APLD’s ability to scale rapidly.The 4-gigawatt active pipeline and ongoing discussions with multiple hyperscalers suggest robust demand for AI-specific capacity. Applied Digital achieved Ready for Service status for the first 50-MW phase at Polaris Forge 1 in October 2025, marking its first operational milestone in transitioning from construction to revenue-generating infrastructure.However, translating infrastructure momentum into sustained revenue growth may create execution complexity. The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $75.95 million, implying an 18.91% year-over-year increase. While this growth trajectory appears promising, APLD’s aggressive capital deployment across multiple simultaneous projects amplifies execution risk. The company's ability to transition from construction activity to predictable recurring lease income will determine whether its AI infrastructure push converts into durable growth.APLD Faces Stiff CompetitionAPLD faces growing competition from Riot Platforms RIOT and Equinix EQIX as the AI infrastructure race accelerates. Riot Platforms mirrors Applied Digital’s blockchain-to-AI transition and operates large power-dense sites in Texas, giving Riot Platforms a strong operational base as it expands into high-performance computing. Riot Platforms also shares similar regional advantages, intensifying the competitive overlap. EQIX brings a very different challenge: operating a global network of more than 260 data centers and maintaining long-standing hyperscale relationships. EQIX’s scale, diversification and ability to retrofit facilities for AI workloads create a powerful counterweight to Applied Digital’s specialized model.APLD’s Share Price Performance, Valuation & EstimatesApplied Digital shares have skyrocketed 200.2% year to date, outperforming the broader Zacks Finance sector’s decline of 6.5% and the Zacks Financial-Miscellaneous Services industry’s appreciation of 13.2%.APLD Stock’s PerformanceImage Source: Zacks Investment ResearchApplied Digital stock is overvalued, with a forward 12-month price/sales of 16.2X compared with the broader sector’s 8.93X and a Value Score of F.APLD ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for the second-quarter fiscal 2026 loss is pegged at 10 cents per share, wider by a penny over the past 30 days. Applied Digital reported a loss of 66 cents per share in the year-ago quarter.Applied Digital Corporation Price and Consensus Applied Digital Corporation price-consensus-chart | Applied Digital Corporation QuoteApplied Digital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Equinix, Inc. (EQIX): Free Stock Analysis Report Riot Platforms, Inc. (RIOT): Free Stock Analysis Report Applied Digital Corporation (APLD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks