Applied Digital reported revenue of $126.6 million in its fiscal 2026 second quarter, a 250% year-over-year increase, driven by the full energization of its first Polaris Forge 1 campus building. High-performance computing hosting with CoreWeave contributed $85 million, while legacy cryptocurrency mining hosting added $41.6 million. The company narrowed its net loss from continuing operations by 76% to $31.2 million and delivered an adjusted net income of $0.1 million, effectively breaking even on a per-share basis and outperforming consensus estimates by $0.21 per share.

Applied Digital is expanding capacity at two North Dakota data center campuses—Polaris Forge 1 and Polaris Forge 2—with multi-year, 15-year leases signed for each facility to secure long-dated cash flows. The company’s partnership with CoreWeave positions it as a key GPU-as-a-Service provider to the AI cloud market. Management expects that continued campus build-outs, coupled with anticipated new client wins, will drive sustained revenue growth and support a forecast of more than $1 billion in operating profits within five years.

Despite robust top-line growth and margin improvement—gross margin expanded to 14.5% in the quarter—Applied Digital’s current valuation reflects high growth expectations and limited profitability history. Investors should weigh the benefits of secured long-term leases and explosive revenue growth against potential execution risks in campus construction timelines and the company’s path to positive free cash flow. The recent 8% share price pop following earnings underscores market confidence, but sustaining this momentum will depend on meeting aggressive expansion milestones and broadening the customer base beyond its core HPC partner.