Applied Digital: The Next AI Infrastructure Powerhouse Poised to Surge Over 100% by 2028

The global AI infrastructure market is undergoing a seismic transformation, driven by insatiable demand for high-performance computing (HPC) and AI workloads. According to a report by MarketsandMarkets, the AI data center market is projected to grow at a compound annual growth rate (CAGR) of 31.6%, expanding from USD 236.44 billion in 2025 to USD 933.76 billion by 2030. This exponential growth is fueled by hyperscalers, cloud providers, and enterprises racing to secure infrastructure capable of handling AI's energy-intensive demands. Amid this surge, Applied Digital (NASDAQ: APLD) has emerged as a strategic player, leveraging its AI-optimized data centers, innovative cooling technologies, and robust financial backing to position itself at the forefront of the AI infrastructure revolution. With a clear path to profitability and a development pipeline exceeding 4 gigawatts, the company is uniquely poised to deliver a 100%+ return for investors by 2028.

Strategic Positioning in AI-Driven Data Center Growth

Applied Digital's AI Factory model is designed to address the critical bottlenecks in AI infrastructure: power density, cooling efficiency, and scalability. The company's Polaris Forge 1 and Polaris Forge 2 campuses in North Dakota exemplify this approach. These facilities utilize direct-to-chip liquid cooling systems, a technology Applied Digital invested in through its $25 million funding of Corintis, to achieve unprecedented energy efficiency. By reducing power usage effectiveness (PUE) to near 1.1, Applied Digital's data centers minimize waste heat and operational costs, a critical advantage in an industry where energy consumption accounts for over 30% of total expenses.

The company's geographic strategy further amplifies its competitive edge. North Dakota's access to low-cost, stranded power and its cold climate enable free cooling, drastically reducing reliance on traditional HVAC systems. This has allowed Applied Digital to secure long-term leases with hyperscalers like CoreWeave and an unnamed U.S. investment-grade hyperscaler, locking in $16 billion in contracted revenue. For context, the $11 billion, 15-year lease with CoreWeave for 400 MW of capacity at Polaris Forge 1 alone represents a revenue stream that could generate $733 million annually, assuming a 100% utilization rate.

Financial Strength and Expansion Catalysts

Applied Digital's financial engineering has been instrumental in scaling its AI infrastructure ambitions. In 2025, the company secured a $5 billion preferred equity facility with Macquarie Asset Management, with $787.5 million allocated to accelerate construction at Polaris Forge 1 and 2. This funding, combined with a $2.35 billion senior secured notes offering, has provided the liquidity needed to fast-track projects while maintaining over 85% common equity ownership-a structure that minimizes dilution and enhances long-term shareholder value.

The results of this capital deployment are already materializing. In fiscal Q2 2026, Applied Digital reported a 250% year-over-year revenue increase to $126.6 million, driven by the energization of Polaris Forge 1's first 100 MW phase. Analysts project this momentum to accelerate: fiscal 2026 revenue is expected to reach $280–297 million, with profitability likely by fiscal 2027 as the Polaris campuses scale to full capacity according to market analysis. By 2028, the company's 4-GW development pipeline-spanning North Dakota, Texas, and potential new markets-could generate over $2.5 billion in annual revenue, assuming current lease rates are maintained.

AI Infrastructure in Fintech: A Lucrative Niche

While Applied Digital's hyperscaler contracts dominate its revenue profile, its infrastructure is increasingly critical to the fintech sector. Financial institutions are adopting AI for applications such as fraud detection, credit risk modeling, and algorithmic trading, which require high-density compute resources. For example, a single AI model for real-time fraud detection can consume 10–15 gigaflops of processing power, a workload that demands infrastructure like Applied Digital's liquid-cooled AI factories.

Though direct fintech case studies are sparse in the public domain, the company's strategic alignment with AI-driven finance is evident. Its partnership with CoreWeave, a cloud provider serving financial clients, underscores this positioning. Additionally, Applied Digital's spinoff of its cloud business into ChronoScale Corporation-a venture focused on GPU-based AI infrastructure- positions it to directly support fintech firms requiring specialized compute resources. As Deloitte notes, 79% of executives anticipate AI-driven power demand to surge through 2035, a trend that will only amplify demand for Applied Digital's infrastructure in finance.

Risks and Mitigants

Despite its strengths, Applied Digital faces challenges. Grid capacity constraints and permitting delays remain significant hurdles for data center expansion. However, the company's focus on North Dakota-a region with underutilized power infrastructure-mitigates these risks. Additionally, its modular construction approach, which reduces build timelines from 24 to 12–14 months, allows rapid scaling as power availability improves.

Another risk lies in the volatility of AI market demand. Should AI adoption slow, Applied Digital's high-fixed-cost model could strain margins. However, the company's long-term leases with hyperscalers provide revenue visibility through 2035, insulating it from short-term fluctuations.

Conclusion: A Compelling Investment Thesis

Applied Digital's confluence of strategic infrastructure, financial strength, and alignment with AI's explosive growth creates a compelling case for a 100%+ return by 2028. With a $16 billion contracted backlog, a 4-GW development pipeline, and a cost structure optimized for AI workloads, the company is uniquely positioned to capitalize on the $50 billion AI data center subsector, which is growing at over 25% CAGR. As fintech and tech sectors deepen their reliance on AI, Applied Digital's purpose-built infrastructure will be indispensable-making it a must-watch stock for investors seeking exposure to the next phase of the AI revolution.