Applied Digital (APLD) shares went up about 28% on Friday morning. The company did better than expected in the first quarter and said it will make its data centers much bigger. Its revenue grew 84% from last year to $64.2 million, more than Wall Street’s guess of $54.6 million.
Chairman and CEO Wes Cummins said this growth shows Applied Digital is an important partner for infrastructure, especially with around $350 billion being spent on AI this year. Barrons reported that Applied Digital’s stock soared after the company finalized the lease with CoreWeave and posted a strong first-quarter performance.
For the quarter ending August 31, Applied Digital reported an adjusted loss of 3 cents per share, much smaller than the 16 cents per share loss analysts had expected. Revenue of $64.2 million exceeded Wall Street’s forecast of $50 million, showing strong growth. The Polaris Forge 1 facility in North Dakota is now fully leased, and construction is on schedule.
For Polaris Forge 2, the company secured $50 million from Macquarie Equipment Capital and raised an additional $200 million through an expanded Series G preferred stock offering. Needham raised its price target for Applied Digital to $41 from $21 and kept a Buy rating, citing confidence in the company’s growth and potential, as mentioned in the report by Investing.com.
Applied Digital’s fiscal first-quarter earnings beat analysts’ expectations, with adjusted EPS of -$0.03 versus the forecasted -$0.14, and revenue of $64.2 million versus the expected $50.97 million.
Applied Digital shares rose after strong first-quarter results and a new 150 MW Polaris Forge 1 lease with CoreWeave.
Q2. What is Polaris Forge 2 and when will it start?
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Polaris Forge 2 is Applied Digital’s new data center, expected to start with 200 MW in 2026 and reach full capacity in 2027.
Applied digital loss and margins
Applied Digital reported a non-GAAP loss of $0.03 per share, which was smaller than analysts had predicted, as stated in the report by GuruFocus.The company’s adjusted EBITDA was $537,000, and the operating margin improved to negative 34.7% from negative 24.2% a year earlier. GuruFocus noted 8 warning signs for Applied Digital, signaling possible risks for investors.Polaris Forge 1 expansion and lease deal
Applied Digital got a new 150-megawatt lease for its Polaris Forge 1 campus. Now, the total contracted IT load with CoreWeave (CRVW) is 400 MW. This new lease could bring about $11 billion in revenue over 15 years.Chairman and CEO Wes Cummins said this growth shows Applied Digital is an important partner for infrastructure, especially with around $350 billion being spent on AI this year. Barrons reported that Applied Digital’s stock soared after the company finalized the lease with CoreWeave and posted a strong first-quarter performance.
For the quarter ending August 31, Applied Digital reported an adjusted loss of 3 cents per share, much smaller than the 16 cents per share loss analysts had expected. Revenue of $64.2 million exceeded Wall Street’s forecast of $50 million, showing strong growth. The Polaris Forge 1 facility in North Dakota is now fully leased, and construction is on schedule.
Polaris Forge 2 and analyst confidence
Applied Digital expects to generate about $11 billion in contracted lease revenue from Polaris Forge 1. The company drew an initial $112.5 million from its $5 billion preferred equity facility with Macquarie Asset Management to fund the completion of Polaris Forge 1. Applied Digital has started construction on Polaris Forge 2, with an initial 200 MW expected to be operational in 2026 and full capacity by 2027.For Polaris Forge 2, the company secured $50 million from Macquarie Equipment Capital and raised an additional $200 million through an expanded Series G preferred stock offering. Needham raised its price target for Applied Digital to $41 from $21 and kept a Buy rating, citing confidence in the company’s growth and potential, as mentioned in the report by Investing.com.
Stock growth and analyst confidence
Applied Digital is now valued at $8.02 billion, and its stock has risen about 283% year-to-date, outperforming the S&P 500. Analysts believe Polaris Forge 1 and 2 could each scale to 1 GW, with up to 4 GW potential capacity long-term, including 300 MW in South Dakota. Needham expects a new lease with a top-rated cloud company at Polaris Forge 2, which will start with 25 MW in late 2026 and gradually increase to 200 MW IT load.Applied Digital’s fiscal first-quarter earnings beat analysts’ expectations, with adjusted EPS of -$0.03 versus the forecasted -$0.14, and revenue of $64.2 million versus the expected $50.97 million.
FAQs
Q1. Why did Applied Digital stock rise today?Applied Digital shares rose after strong first-quarter results and a new 150 MW Polaris Forge 1 lease with CoreWeave.
Q2. What is Polaris Forge 2 and when will it start?
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