Applied Digital Corp (NASDAQ: APLD) has posted fiscal fourth quarter 2026 revenue of $258.7 million, a staggering 407% increase year over year, blowing past analyst estimates of $94.8 million.
The company’s full-year revenue climbed 167% to $611.3 million, confirming that its pivot from crypto-mining and data center hosting to AI infrastructure is generating real financial results.
Adjusted earnings per share came in at $0.04, well above expectations of a $0.22 loss, signaling that profitability metrics are beginning to align with the company’s aggressive growth narrative.
Shares have gained more than 20% year to date, though the stock remains volatile and has not yet reclaimed some of its recent highs, reflecting market caution around execution and cash flow timing.
The company’s Data Center Hosting segment tells the clearest story of its transformation, with segment revenue climbing from $38 million in Q4 FY2025 to $203 million in Q4 FY2026 as hyperscaler leases scale rapidly.
Applied Digital has secured a $7.5 billion deal at its Delta Forge 1 campus and a long-term lease with CoreWeave for its Polaris Forge campus, generating approximately $7 billion in contracted revenue across roughly 15 years.
Across five AI factory campuses, the company now holds approximately 1.4 gigawatts in contracted critical IT capacity and $36 billion in contracted base-term lease revenues, providing significant long-term revenue visibility.
That contracted revenue base is a key differentiator, giving Applied Digital greater forward visibility than a typical data center developer and underpinning investor confidence in its long-term growth trajectory.
Despite the compelling growth story, meaningful risks remain, including the company’s dependence on a relatively small number of large customers whose loss or financial difficulties could materially impact revenue.
The company’s capital-intensive model also exposes it to financing risk, as delays or cost increases in building power-dense AI infrastructure could pressure returns and push back expected cash flow timelines.
Applied Digital faces stiff competition from rivals with stronger balance sheets, including TeraWulf Inc. (NASDAQ: WULF), which is also expanding aggressively into AI and high-performance computing opportunities.
On valuation, APLD trades at a trailing price-to-sales multiple of roughly 15x, well above the sector average of 3.5x, though that compares favorably with TeraWulf’s approximately 56 times trailing sales.
Applied Digital carries a short interest of 27.02% of float versus 25.04% for TeraWulf, creating the potential for additional volatility if strong fundamentals pressure bearish investors to reverse their positions.
Hedge fund positioning remains relatively modest, with 39 hedge funds holding stakes in APLD as of the first quarter, compared to 68 hedge funds invested in TeraWulf, according to Insider Monkey’s database.
Hood River Capital Management, Situational Awareness LP, and Value Aligned Research Advisors each increased their APLD stakes in the first quarter by 5%, 19%, and 19%, respectively, suggesting selective but growing institutional interest.
The next critical phase for Applied Digital is execution: bringing contracted capacity online on schedule, controlling capital costs, and converting long-term lease commitments into sustainable free cash flow for shareholders.
