Applied Digital Stock Surges 28%. More Than Strong Results Are Lifting the Shares.

Applied Digital stock has gained 238% this year. (Funtap P/Dreamstime)

Key Points

• Applied Digital reports an adjusted loss of 3 cents a share, narrower than analysts’ expectations for a loss of 16 cents.
• Revenue reaches $64.2 million, surpassing Wall Street forecasts of $50 million for the quarter.
• A new agreement with CoreWeave for 150 megawatts at Polaris Forge 1 fully leases the North Dakota campus.

Applied Digital stock soared Friday after the data-center operator posted a solid fiscal first quarter and unveiled a new lease agreement with a significant player in cloud computing.

For the quarter ended Aug. 31, Applied Digital reported an adjusted loss of 3 cents a share, narrower than the 16 cents a share loss analysts had anticipated. Revenue of $64.2 million topped the $50 million Wall Street had forecast.

The company said after the closing bell Thursday that it had finalized a new lease agreement with CoreWeave for an additional 150 megawatts of power at Applied Digital’s Polaris Forge 1 campus in North Dakota. The facility is now fully leased, management added.

Shares surged 28% to $37.52 on Friday. The stock has gained 391% this year, outstripping a 15% gain for the S&P 500 .

Applied Digital expects to generate about $11 billion in contracted lease revenue from Polaris Forge 1. Construction at the campus is still under way but remains on schedule, the company noted.

Applied Digital said it drew an initial $112.5 million from its $5 billion preferred equity facility with Macquarie Asset Management to fund the project’s completion.

The company has also broken ground on its Polaris Forge 2 campus, with an initial 200 megawatts of power expected to come online in 2026 and reach full capacity in 2027.

Applied Digital secured $50 million from Macquarie Equipment Capital for this facility, and raised an additional $200 million from an expanded offering of its Series G preferred stock.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com