APLD Soars 28% After Blowout Quarter and $11B CoreWeave Deal Sparks Short Squeeze

Applied Digital (APLD) delivered the kind of “AI picks-and-shovels” quarter that moves a stock, and today it did—up roughly 28% after reporting results that topped expectations and pairing them with an assertive growth roadmap. At the center of surging AI data-center demand, APLD posted fiscal Q1 revenue of $64.2 million, up 84% year on year, and adjusted EPS of −$0.03—both better then consensus . Management leaned into a multi-gigawatt development plan, highlighted financing progress, and reiterated long-term targets that sharpen the line of sight to material earnings power. With short interest near 32%, the magnitude of the move also carries the look of a squeeze as investors reprice execution risk against contracted growth.

Versus expectations, the upside was clean at the top and bottom line even as mix weighed on profitability metrics. The revenue beat—ahead of the roughly $51 million Street view—was driven by $26.3 million of tenant fit-out work in the High-Performance Computing (HPC) Hosting segment alongside steady gains in the legacy data-center hosting business. Adjusted EPS of −$0.03 beat by a dime; adjusted EBITDA of about $0.5 million was softer than some models, reflecting the lower-margin nature of installation revenue during the build phase and the inevitable operating-expense step-up that accompanies rapid scaling. On a GAAP basis, the company reported a net loss of $27.8 million (−$0.11), with SG&A elevated by stock-based compensation and personnel costs tied to growth.

The growth engine is straightforward: leases and megawatts. APLD signed an additional 150 MW with CoreWeave at its Polaris Forge 1 campus in Ellendale, North Dakota, taking the full 400 MW of critical IT load under contract. Across approximately 15-year terms, management now pegs anticipated contracted lease revenue at about $11 billion for that site alone. Once Polaris Forge 1 is fully operational, APLD believes it is tracking toward an annualized NOI run-rate of roughly $500 million. The company also broke ground on Polaris Forge 2 near Harwood, North Dakota, initially designed for 300 MW with the potential to scale to 1 GW. The first 200 MW is expected to come online in phases starting in 2026 and reach full capacity in 2027. Management is in advanced discussions with an investment-grade hyperscaler for PF2; a signed lease would lift total leased capacity to about 600 MW across the two campuses and give the prospective tenant a right of first refusal on the remaining capacity.

Operationally, Polaris Forge 1 continues to progress on time and on budget. The first 100 MW building is nearing completion with tenant fit-out underway, and construction has started on the next 150 MW building. The design emphasizes ultra-efficient, liquid-cooled deployments—closed-loop, direct-to-chip architecture targeting a design PUE of roughly 1.18 and near-zero water consumption—leveraging abundant, low-cost power and over 200 days of free cooling annually in North Dakota. Meanwhile, APLD’s data-center hosting business serving crypto miners remains fully utilized at 106 MW in Jamestown and 180 MW in Ellendale, providing a cash-generating base as AI leases ramp later in the build cycle.

The industry backdrop remains favorable—and unusually capacity constrained. Management framed APLD as a trusted strategic partner to major technology platforms in a market where hyperscalers’ AI deployments are stretching traditional air-cooled footprints and straining supply chains for advanced liquid-cooling infrastructure. The company reiterated that its strategic review of the cloud services business is ongoing, but the core development program is shifting from sequential to parallel builds across multiple states, with timing governed by power allocations, interconnect readiness, and project finance cadence. In short, the bottleneck is increasingly about grid and transmission, not customer appetite.

On the balance sheet, APLD ended the quarter with $114.1 million in cash, cash equivalents, and restricted cash against $687.3 million of debt; subsequent to quarter-end, it received about $362.5 million of additional proceeds. The financing stack is evolving quickly: the company drew an initial $112.5 million from an up-to-$5 billion preferred-equity facility with Macquarie Asset Management to advance PF1, secured $50 million of equipment capital for PF2, and raised $200 million via an expanded Series G preferred. Management’s stated goal is to recycle equity as assets stabilize, lower the blended cost of capital, and support a build program that could ultimately require $20–$25 billion of total capital. Free cash flow remains negative given the heavy capex phase, but the intent is clear: use project-level financing and long-duration leases to bridge from construction to NOI scale.

Risks are typical for a company jumping several size brackets at once: elevated SG&A, rising interest expense, and the need to synchronize power, transmission, and tenant installations. APLD counters with long-term, creditworthy contracts, early-secured manufacturing capacity, and a standardized campus blueprint built around liquid-cooled density. Execution remains the watchword, but the pieces—leases, funding, and a replicable design—are increasingly in place.

Bottom line, APLD is evolving from opportunistic builder to institutional-grade landlord for AI compute. If management lands the PF2 anchor lease on the terms signaled, the company moves a step closer to its five-year $1 billion NOI target. The stock’s sharp reaction—helped along by 32% short interest—reflects a market acknowledging that optionality. From here, the milestones that matter are PF1’s first 100 MW reaching ready-for-service and revenue recognition ramping, PF2 lease execution and financing, and continued progress converting a multi-gigawatt pipeline into contracted megawatts. In a market hungry for specialized AI infrastructure, APLD’s path is increasingly defined by scale, not story.