Applied Digital (NASDAQ: APLD) went from building data centers for crypto miners to signing multibillion-dollar AI infrastructure contracts in roughly a year. The stock, meanwhile, has gone from nearly $50 in June to $23.81.
Then came its latest fiscal Q1 2027 earnings report, where revenue jumped 322% to $341.9 million, while adjusted EBITDA surged from $0.5 million to $64.4 million. Now those numbers are starting to put some operating weight behind the AI infrastructure story. Applied Digital now has approximately 1.41 GW of critical IT load under lease, representing roughly $36 billion of contracted revenue over the initial lease terms.
The earnings also exposed the enormous capital burden sitting underneath that growth. That tension is what makes APLD worth looking at here.
The AI Buildout Is Now Showing Up in the Income Statement
The headline growth was huge, but the composition of the quarter is what makes it more useful. HPC Hosting generated $262.6 million of revenue, including $65.8 million of base rent and $183.5 million from tenant fit-out services, producing $33.4 million of segment operating profit.
Base-rental revenue is particularly important because it represents the recurring economics of the infrastructure once customers are actually occupying it. The business generated $58.8 million of NOI, giving the operating campuses an 89% NOI margin.
The broader financial picture moved sharply as well. Adjusted revenue excluding ChronoScale reached $300.4 million versus $64.2 million a year earlier, while adjusted net loss narrowed to just $4.1 million from $7.6 million.
For a company still building billions of dollars of infrastructure, going from essentially zero adjusted EBITDA to $64.4 million in one year is the number I care about most.
Source: Applied Digital
Building AI Factories Is Expensive as Hell
There is another side to those numbers, and the balance sheet makes it impossible to ignore. Applied Digital reported a $221 million net loss from continuing operations, compared with an $18.5 million loss a year earlier. Interest expense jumped 866% to $77.4 million, while SG&A climbed 289% to $114.7 million.
The company also spent roughly $2.07 billion on property and equipment during the quarter, while generating just $63.9 million of operating cash flow. As of August 31, it held $3.7 billion in cash, cash equivalents, and restricted cash against $6.4 billion of debt.
That is the tradeoff investors are making with Applied Digital. The company can produce extraordinary revenue growth when new AI capacity comes online, but getting that capacity online requires an extraordinary amount of capital first.
And management is still funding the pipeline aggressively. Applied Digital closed a $1.59 billion senior secured notes offering to fund construction of the 150 MW third HPC building at Polaris Forge 1 and repay a $300 million bridge facility. So the earnings don’t eliminate the financing risk. They show why the company keeps taking it.
1.41 GW Is Where the Earnings Story Gets Bigger
The reason investors can tolerate that capital intensity is the contracted backlog sitting behind it. The company has leases covering approximately 1.41 GW across five campuses, with roughly $36 billion of contracted revenue during the initial lease terms and approximately $86 billion if renewal options are exercised.
And the physical buildout is advancing. Polaris Forge 1 reached 250 MW of live capacity after its second 75 MW phase became operational on October 1. Management expects Polaris Forge 2 to bring delivered critical IT load across its North Dakota campuses to 300 MW by year-end 2026.
That progression is important because APLD is gradually moving from signing leases to collecting the economics attached to those leases. The first 100 MW building at Polaris Forge 1 became operational in October 2025. Building 2 added another 150 MW in two phases, while the third 150 MW building and several other campuses remain under construction.
If APLD can keep converting that contracted capacity into operating campuses without blowing out construction costs or its financing requirements, the earnings base could look dramatically different over the next several years.
APLD Has Already Taken the Beating
The stock doesn’t look like it’s pricing that future in with much enthusiasm. Post-earnings, APLD closed at $23.81, with the 20-day SMA at $25.70, the 50-day at $27.09, and the 200-day at $32.13. The shares are down heavily from their roughly $50 peak in June, but they are now sitting near the rising support trendline that has developed from the April lows.
That creates a weird technical setup. The fundamentals are expanding while the stock remains below all three major moving averages. A reclaim of the $25.70 20-day SMA, followed by the $27.09 50-day, would begin repairing the tape. Above that, the 200-day around $32.13 becomes the larger technical hurdle. Lose the current $23-$24 support zone, however, and the market would be signaling that investors are still more concerned about APLD’s capital requirements than its contracted AI infrastructure.
Here’s Why APLD Is Still a Buy
This quarter showed that the AI buildout is no longer just a collection of leases and construction projects sitting on a presentation slide. Revenue is scaling, EBITDA is appearing, operating campuses are expanding, and 1.41 GW of contracted capacity gives the company a substantial runway. That makes Applied Digital a buy for me.
