Applied Digital (NASDAQ: APLD) is pressing ahead with one of the most aggressive AI infrastructure expansion programs in the sector, simultaneously developing five AI Factory campuses across multiple locations.
The active campuses include Polaris Forge 1, Polaris Forge 2, Delta Forge 1, and Delta Forge 2, with construction on a fourth building at Polaris Forge 1 already underway before the third building has reached full utilization.
On July 1, 2026, Applied Digital placed Phase 1 of the second building at Polaris Forge 1 into service, adding 75 megawatts of operational capacity and bringing the campus to 175 megawatts of live power.
Despite that milestone, the campus remains well below the 400 megawatts already leased to CoreWeave under long-term agreements, meaning more than half of contracted capacity has yet to generate recurring lease revenue.
To fund this expansion, Applied Digital has leaned heavily on project-level debt financing rather than internally generated cash flows, a strategy that has rapidly grown its balance sheet obligations.
The company raised $1.59 billion through senior secured notes due 2031 to fund the fourth building at Polaris Forge 1, following an earlier $300 million bridge facility for the same project and a $2.15 billion senior secured notes offering for Polaris Forge 2.
An additional debt tranche remains to be placed for Polaris Forge 1, signaling that financing requirements will stay elevated as construction continues across the development pipeline.
Applied Digital posted adjusted EBITDA of $44.1 million in its fiscal third quarter, while total debt stood at approximately $2.7 billion at the end of that period.
The pace of capital deployment continues to outstrip current operating cash generation, keeping the company firmly in an investment-heavy phase until contracted capacity translates into consistent lease revenue.
Applied Digital competes with IREN Limited and TeraWulf in the race to build AI infrastructure for hyperscale customers, though its multi-campus approach involves larger upfront capital commitments and greater dependence on external financing than either rival.
Applied Digital shares have surged 34.8% year to date, easily outpacing the broader Zacks Finance sector’s decline of 9% and the Zacks Financial-Miscellaneous Services industry’s modest gain of 4.5%.
Despite that strong price performance, the stock trades at a forward 12-month price-to-sales ratio of 12.06x, compared with the broader sector’s 2.81x, a premium that reflects investor appetite for AI infrastructure exposure.
The Zacks Consensus Estimate for the fiscal 2026 loss stands at 70 cents per share, an improvement from the 80-cent-per-share loss reported in the prior year, though estimates have remained unchanged over the past 30 days.
Applied Digital currently carries a Zacks Rank of 5, designated as a Strong Sell, as analysts weigh the company’s long-term growth potential against its near-term financial pressures and sustained capital intensity.
