Applied Digital (APLD) has seen a significant surge in its stock price, rising by 30% in pre-market trading on a recent Friday. This increase follows the company’s announcement of improved quarterly financial results and a new lease agreement with CoreWeave (CRWV).
Strong Financial Performance
For the quarter ending August 31, Applied Digital reported an adjusted loss of $0.03 per share. This outcome was notably better than the anticipated loss of $0.16 per share. Additionally, the company generated revenue of $64.2 million, surpassing expectations of $50 million.
CoreWeave Lease Expands Capacity
A significant aspect of Applied Digital’s recent update is the new lease agreement with CoreWeave. This deal secures an additional 150 megawatts of power at the Polaris Forge 1 campus in North Dakota, effectively filling the site to full capacity.
- The lease agreement with CoreWeave is a pivotal milestone for Applied Digital.
- It enhances their relationship with a prominent player in AI cloud infrastructure.
- This fully leased site provides substantial revenue visibility for upcoming years.
Revenue Projections
With the lease in place, Applied Digital anticipates generating approximately $11 billion in contracted lease revenue from the Polaris Forge 1 facility. The company reassured stakeholders that construction at this site is proceeding as scheduled, complemented by ongoing expansion plans to satisfy rising customer demand.
Funding Secured for Development
To bolster its development initiatives, Applied Digital has accessed $112.5 million from its $5 billion preferred equity facility with Macquarie Asset Management. This funding will support the completion of Polaris Forge 1 and other forthcoming projects.
Additionally, the company has secured $50 million from Macquarie Equipment Capital and $200 million through the expanded offering of its Series G preferred stock. These moves indicate a sustained confidence among institutional investors regarding Applied Digital’s growth trajectory.
Future Expansion Plans
Construction of the Polaris Forge 2 site is now underway, which will add another 200 megawatts of capacity. The first phase of this project is set to launch in 2026, with full capacity expected by 2027. This new facility is designed to accommodate the growing demand for AI workloads and services from enterprise clients.
Stock Performance and Analyst Outlook
Following these announcements, Applied Digital shares traded at $38.25 during pre-market hours, marking an impressive 238% increase year-to-date. In contrast, the S&P 500 has risen about 14.5% in the same timeframe.
Wall Street analysts remain highly optimistic about Applied Digital’s prospects. All eight analysts covering the stock have rated it a Buy, resulting in a consensus rating of “Strong Buy.” The average target price for APLD is set at $27.43, suggesting a modest downside of 6.35% from its latest closing price.
