Applied Digital soars 12% as Q4 earnings beat estimates

Applied Digital Corporation (APLD) shares surged 12.6% after reporting a significantly better-than-expected Q4 adjusted loss of -$0.03 per share, despite a revenue miss. The positive market reaction was primarily driven by the announcement of transformative 15-year lease agreements with AI hyperscaler CoreWeave for its North Dakota data center, securing 250MW of IT load with an option for an additional 150MW, projecting up to $11 billion in contracted revenue. This strategic pivot firmly establishes APLD as a critical infrastructure provider for high-performance computing and AI, signaling robust long-term growth prospects.

Analysis

Applied Digital Corporation (APLD) reported mixed fiscal Q4 2025 results, with an adjusted loss per share of -$0.03 significantly beating consensus estimates of -$0.14, while revenue of $38 million missed the forecast of $42.07 million. Despite the revenue shortfall, the company's shares surged 12.6% in after-hours trading, indicating that investors are prioritizing strategic developments over the headline quarterly figures. The primary driver of this positive sentiment is the announcement of two transformative 15-year lease agreements with AI hyperscaler CoreWeave. These contracts secure 250 megawatts of IT load at APLD's North Dakota data center, projecting to generate approximately $7 billion in contracted revenue. Furthermore, a CoreWeave option for an additional 150MW could elevate the total contracted revenue to around $11 billion, providing substantial long-term visibility and fundamentally de-risking the company's future cash flows. This deal validates APLD's strategic pivot to becoming a key infrastructure provider for the high-performance computing and AI sectors, with its Polaris Forge 1 campus now a cornerstone asset on track for its first service delivery in the second half of 2025. The legacy data center hosting business for crypto mining remains fully utilized, providing a stable operational base.

Key Decisions for Investors

• Investors should evaluate Applied Digital based on its newly secured long-term contracted revenue stream of $7-11 billion from the CoreWeave partnership, which fundamentally de-risks its growth profile and overshadows the recent quarterly revenue miss.
• It is now critical to monitor execution risk, specifically the company's ability to deliver the first 100MW HPC facility at its North Dakota campus on schedule in the second half of 2025, as this is the key milestone for realizing the contracted revenue.
• Consider the potential for a valuation re-rating as the company's business model shifts from a speculative crypto-exposed operation towards a more stable, long-term AI infrastructure provider, which may attract a new class of institutional capital.