Applied Digital Could Have 155% Upside Ahead of July 27 Q2 Earnings
Applied Digital operates like a landlord collecting rent on AI infrastructure, and its backlog of signed leases tells a story that Wall Street analysts are scrambling to price in before the next earnings report drops.
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Applied Digital (NASDAQ:APLD) is a rare AI infrastructure story that behaves like a landlord, benefiting from long-duration, contracted revenue streams while masquerading as a growth stock. The company develops and operates specialized data centers, making money by leasing computing capacity to AI and high-performance computing customers.
With $16 billion in aggregate prospective lease revenue already signed and 15-year hyperscaler leases underwriting the buildout, the buy case rests on the simple premise that buildings will open on schedule, which they are.
$16 Billion in Signed Lease Backlog Makes the Bull Case
Polaris Forge 1 is 400 MW fully contracted to CoreWeave for roughly $11 billion in contracted revenue, and Polaris Forge 2 added a 200 MW lease with a U.S. investment-grade hyperscaler worth approximately $5 billion over its term.
Management has reiterated a target of $1 billion in NOI within five years. That is REIT-grade cash flow visibility attached to a pipeline of roughly 1 GW across four development sites.
Applied Digital’s Earnings Inflection Has Arrived
Q3 FY2026 revenue hit $126.64 million, up 139.3% year over year, while adjusted EBITDA jumped to $44.14 million from $6.26 million a year earlier. Adjusted EPS came in at $0.09 against a -$0.21 consensus, the fourth straight beat. Analysts have followed with 11 buy ratings, zero holds, and zero sells, and a $76.70 target implying 154.99% upside from the current $30.08.
Why Applied Digital Beats the Obvious AI Alternative
The natural comparison is IREN (NASDAQ:IREN), the other pure-play AI/HPC data center peer transitioning from Bitcoin. IREN posted 0% quarterly revenue growth YoY at last report against APLD’s 139.3%. Over the last year, APLD returned 174.7% versus IREN’s 122.05%. For retirement money, growth backed by signed leases beats growth backed by GPU spot pricing.
The Two Biggest Risks Are Already Shrinking
Yes, GAAP losses are real, and the company’s CoreWeave revenue concentration is real. However, the company has $1.73 billion in cash, attractive financing with a $2.15 billion senior secured notes offering at 6.750% to fund Polaris Forge 2, and a new investment-grade hyperscaler diversifying the customer base. Insiders have logged 12 recent buy transactions. The people closest to the numbers are adding, not trimming.
Retirement investors looking for multi-decade AI infrastructure exposure with contracted cash-flow visibility have a compelling case to research APLD today.
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Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
