Priced for Perfection? APLD’s Q3 Could Turn CoreWeave Contracts into Rocket Fuel—or Reality Check

Applied Digital (APLD) reports fiscal Q3 tomorrow before the open, and the setup is classic high-beta infrastructure: a pipeline stuffed with long-dated AI/HPC leases, construction milestones stacked through 2027, and financing that has to show up on time. The stock has been on a tear—up roughly 255% year to date, +191% over the past quarter, and +79% in a month—with momentum helped by a series of CoreWeave wins and fresh capital. With short interest near a third of the float and RSI in overbought territory, the reaction is likely to be binary: clean execution and credible financing detail could extend the squeeze; any wobble on timelines or funding will invite gravity.

Into the print, the Street is looking for revenue around the mid-$50 millions (roughly $55M is a common placeholder) and adjusted EPS near –$0.16. The big question is mix and cadence. Management previously flagged that revenue should step up sequentially as “fit-out” work at the Ellendale, North Dakota campus (Polaris Forge 1) is recognized ahead of recurring lease revenue. Investors will parse gross margin for early evidence of scale benefits, and they’ll want to see adjusted EBITDA bending toward breakeven as fixed costs stretch over a larger base. On the balance sheet, the focus shifts from GAAP optics to liquidity and project-level funding: how quickly Applied can draw against committed facilities and lock non-recourse structures for each building will matter more than any single quarter’s EPS.

Q2 established the jumping-off point. Applied printed $38M of revenue (in line) and an adjusted loss of $0.03 per share, better than expected. Operating lines were still red, but the company posted about $1M of adjusted EBITDA, reduced interest expense, and finished with roughly $121M in cash before subsequent raises. Management leaned hard into execution: compressing build cycles from ~24 months to 12–14 months by standardizing designs, cutting SKUs, and consolidating suppliers. The goal is a repeatable, lower-variance playbook: fewer bespoke headaches, faster energization, earlier rent.

CoreWeave is the center of gravity. Three 15-year leases now total 400MW at Ellendale, which management pegs at roughly $7B of contracted revenue over term. Importantly, CoreWeave exercised its option for the final 150MW—confirming the tenant will consume the entire facility under construction—and allowing Applied to focus on the remaining 600MW of potential campus expansion plus a broader 1.4GW pipeline. The timeline is straightforward: the first 100MW is expected to begin ramping late this year as fit-out completes and customer gear arrives, the next 150MW targets mid-2026, and the final 150MW lands in the first half of 2027. Polaris Forge 2, a separate campus with an initial 280MW, is slated to break ground in 2025, to be operational in 2026 and at full capacity in 2027. For a market that pays for visibility, this is the story bulls want to hear—now they need dates met, not moved.

Funding the plan has been a second narrative arc. Applied announced the first draw—$112.5M—from its up to $5B perpetual preferred equity facility with Macquarie Asset Management, specifically to support the 400MW Ellendale build. The structure aims to scale the campus without crushing the corporate balance sheet. Separately, on September 26 the company filed to sell 8.39M shares for selling holders. Because that’s secondary supply rather than a primary issuance, dilution optics are milder, but an incremental float is still an incremental float—relevant for a stock with a 33% short interest and lively momentum. Options chatter has also ticked up (a large call purchase flagged on social media), which tends to amplify post-earnings swings in either direction.

The “what’s next” question is the potential hyperscaler deal. Management says discussions with a U.S. hyperscaler for about 1GW are in an advanced stage. One sell-side base case pegs that opportunity at roughly $13.9 per share of incremental equity value (inclusive of capex). That’s the kind of anchor that would push visibility deeper into 2028 and beyond, and it would also rationalize the Polaris Forge 2 ramp. Until it’s signed, however, investors are underwriting probability rather than cash flow—never a tranquil exercise at a double-digit sales multiple.

Recall the key Q2 guideposts: fit-out revenue first, lease revenue next; first 100MW ramping late this year; subsequent 150MW tranches in mid-2026 and 1H27; preference for full-stack colo rather than powered shell; and financing that targets ~70% loan-to-cost with a lead bank in place. Management also noted it had completed diligence and onboarding with two additional investment-grade North American hyperscalers, and that a strategic review of Cloud Services continues (read: focus and capital go to brick-and-mortar AI factories).

What would qualify as a “good” quarter? Numbers roughly in line with consensus are fine so long as the call delivers tangible construction updates , energization milestones, and a firmed-up funding cadence from the Macquarie facility and project lenders. Any incremental color—dates, interconnect progress, tenant gear arrival—will carry more weight than a penny of EPS. Credible commentary on the 1GW pipeline would be icing.

Peers will likely move with the print and the guide. Watch IREN, RIOT, HUT, MARA, CLSK, CIFR, HIVE, BITF, BTBT—and of course CoreWeave chatter in the background. The group has been trading like a single factor: clean execution and solid financing tend to lift all ships; timeline slippage can dunk them just as fast.

Bottom line: APLD’s quarter is less about beating a number and more about de-risking a multiyear capex marathon. If the company can show that Ellendale’s first 100MW is on schedule, that Macquarie capital is flowing as planned, and that the hyperscaler pipeline is edging from “advanced” to “actionable,” the market will keep rewarding visibility. If not, a stock priced for flawless execution can find out how quickly perfection gets repriced. Dryly put: tomorrow morning is a construction update in earnings clothing.