Applied Digital offers leveraged exposure to AI infrastructure, with a $36 billion backlog supporting substantial upside but execution and debt risks demanding a discount.
Overview
Applied Digital (APLD) develops and operates high-density digital infrastructure for AI, HPC, and blockchain workloads. Its model secures grid capacity, constructs liquid-cooled data-center shells, and leases them to specialized cloud providers and investment-grade hyperscalers. **The central investment case is the $36 billion contracted backlog over 15 years**, with more than 70% backed by investment-grade hyperscalers, versus a current share price of $27.19. Q4 FY2026 revenue reached $258.7 million, up 407% year over year and 171.5% above consensus, while adjusted EBITDA was $42.4 million and adjusted EPS was $0.04 versus an expected loss of $0.19. Full-year revenue rose 167% to $611.3 million and adjusted EBITDA reached $107.2 million. The company is highly leveraged, with $4.96 billion of long-term debt, but has $1.59 billion of cash, $2.38 billion of restricted construction cash, and access to a $5.0 billion Macquarie preferred-equity facility. Near-term catalysts include bringing Polaris Forge Buildings 2 and 3 online, progressing Polaris Forge 2, and converting contracted capacity into recurring rent. The report’s probability-weighted five-year value is $57.58.