Will Applied Digital's Pivot to AI Infrastructure Broaden Its Revenue Base?

Applied Digital APLD is deepening its strategic shift from blockchain hosting towards high-performance computing infrastructure designed for artificial intelligence(AI) workloads. This evolution signals a structural reorientation of its business model toward long-term, contract-based revenue streams and away from cyclical crypto-driven demand.APLD’s growing presence across North Dakota anchors this transition. Its fully leased 400-megawatt Polaris Forge 1 campus represents over $11 billion in contracted lease value, offering multi-year visibility and validating Applied Digital’s technical and operational capabilities. Building on this foundation, APLD has commenced construction of Polaris Forge 2, a 300-MW AI-optimised facility near Harwood. The new campus is engineered for scalable expansion, positioning Applied Digital to serve hyperscalers seeking purpose-built, liquid-cooled capacity for next-generation AI systems. Together, these developments illustrate how APLD is transitioning into a key enabler of large-scale AI compute infrastructure.However, the financial transition remains in progress. The Zacks Consensus Estimate for the second quarter fiscal 2026 revenue is pegged at $63.5 million, implying a 0.66% year-over-year decline as construction-driven income tapers and lease revenue begins to ramp. This moderation reflects a timing reset rather than weakness. As recurring contracts start contributing, Applied Digital’s earnings profile is expected to become more stable and margin-accretive. The company’s next phase hinges on disciplined execution — balancing capital efficiency, timely project delivery and deeper penetration across hyperscaler clients — to translate its AI infrastructure investments into durable, recurring growth.APLD Faces Stiff Competition in the AI Infrastructure SpaceApplied Digital competes with emerging and established players such as Riot PlatformsRIOT and EquinixEQIX in the fast-expanding AI data centre market. Riot Platforms is scaling beyond crypto mining with new high-performance computing facilities exceeding 1 gigawatt of planned capacity to support AI workloads. Equinix, meanwhile, operates over 260 global data centres, leveraging its xScale portfolio to serve hyperscalers seeking power-dense infrastructure. Both Riot Platforms and Equinix have scale and strong customer ecosystems, while Applied Digital’s strength lies in its purpose-built, liquid-cooled architecture and faster deployment timelines. These factors could help APLD compete more efficiently for AI-driven infrastructure demand.APLD’s Share Price Performance, Valuation & EstimatesApplied Digital shares have skyrocketed 300.8% year to date, outperforming the broader Zacks Finance sector’s return of 12.4% and the Zacks Financial-Miscellaneous Services industry’s modest appreciation of 0.6%.APLD Stock’s PerformanceImage Source: Zacks Investment ResearchApplied Digital stock is overvalued, with a forward 12-month price/sales of 23.21X compared with the broader sector’s 9.26X. APLD has a Value Score of F.APLD ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for the second-quarter fiscal 2026 loss is pegged at 11 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.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>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