Applied Digital Shares Soar 16% as Explosive AI Demand Fuels $11bn Lease Expansion and Record Revenue Growth

Applied Digital Corp. shares surged 16 percent on Friday after the company reported a powerful first-quarter performance driven by surging demand for artificial intelligence (AI) data centers — a trend rapidly transforming AI infrastructure into one of the most lucrative segments of the global technology industry.

The stock, which has now climbed more than 350 percent this year, reflects investor enthusiasm for smaller infrastructure firms cashing in on the capital boom behind AI development.

The North Dakota-based company posted first-quarter revenue of $64.2 million, up 84 percent year-on-year from $34.85 million, and well ahead of LSEG’s forecast of $50 million. Its net loss narrowed to $18.5 million, or 7 cents per share, compared with a loss of $4.29 million (3 cents per share) a year ago, and better than the 13-cent loss analysts expected.

Applied Digital’s strong quarter underscores how the AI infrastructure race — once dominated by tech giants like Amazon, Microsoft, and Google — is now opening vast opportunities for smaller players building data centers, power systems, and cooling facilities to host AI workloads. Industry estimates show that global hyperscalers are expected to invest around $350 billion in AI infrastructure this year alone, and demand continues to outstrip available capacity.

During the quarter, Applied Digital deepened its partnership with CoreWeave, the New Jersey-based AI cloud computing startup, by adding another 150 megawatts (MW) of capacity to their existing lease agreement announced in June. The expansion brings their total contracted capacity at the company’s Polaris Forge 1 campus in North Dakota to 400 MW, raising the total value of the lease deal from $7 billion to $11 billion.

“With hyperscalers expected to invest approximately $350 billion into AI deployment this year, we believe we are in a prime position to serve as the modern-day picks and shovels of the intelligence era,” said Wes Cummins, CEO of Applied Digital.

The new 150 MW building will join two other large data cell blocks — one of 100 MW and another of 150 MW — on the same campus. Applied Digital said construction on the new facility will begin shortly, while one of the existing buildings is nearing completion.

To meet escalating AI demand, the company has also secured funding from Macquarie Equipment Capital for a second massive campus, Polaris Forge 2, also in North Dakota. The $3 billion project will house two additional 150 MW data centers, bringing Applied Digital’s total contracted capacity to 600 MW across both campuses.

According to the company, the first 200 MW of power from Polaris Forge 2 is expected to come online in 2026, with full capacity expected by 2027.

The company’s rapid expansion mirrors a broader boom in AI-related infrastructure investment worldwide. Data centers tailored for AI training and inference, often requiring several times more power and cooling capacity than traditional cloud centers, have become the backbone of the artificial intelligence economy. With global chip shortages and soaring power demands, companies that can build and operate such specialized facilities are seeing extraordinary growth.

Applied Digital’s transformation reflects that trend. Founded as a blockchain mining infrastructure company, it has successfully repositioned itself as an AI data center operator — pivoting from the volatile cryptocurrency market to the fast-growing AI compute industry. Analysts say that the strategic shift has made Applied one of the top-performing small-cap tech stocks of 2025.

Still, the company remains in a high-spending phase, as it continues to pour capital into construction and equipment procurement. Analysts polled by LSEG expect Applied Digital to post a second-quarter loss of 15 cents per share on revenue of $76 million, reflecting continued investment before its new facilities begin contributing more meaningfully to profit.

The company’s alliance with CoreWeave — a startup backed by Nvidia and valued at over $19 billion — is a cornerstone of that future. The long-term lease commitments provide Applied Digital with a predictable revenue base stretching years ahead, a rarity among smaller infrastructure firms.

Applied Digital’s growth surge also comes as Wall Street grows increasingly bullish on companies enabling the AI supply chain — from chipmakers like Nvidia and AMD to cooling system manufacturers and hyperscale construction contractors. Many analysts now describe data center infrastructure as the “picks and shovels” of the AI revolution, echoing Cummins’ sentiment that these firms are “powering the intelligence economy from the ground up.”

With the AI arms race intensifying and demand for compute capacity continuing to accelerate, Applied Digital’s position as a specialized infrastructure provider appears to be securing it a front-row seat in one of the fastest-expanding and most profitable corners of modern technology.