Applied Digital: A Most Peculiar Investment

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The currents of progress, as anyone who’s seen a particularly ambitious beaver at work can attest, rarely flow in a straight line. We’re told it’s all about the chips, the clever algorithms, the… well, the magic that makes artificial intelligence tick. But magic, dear reader, requires a workshop, and workshops require power. And cooling. A great deal of cooling. It’s becoming increasingly clear that the real gold rush isn’t in creating the intelligence, but in housing it. The hyperscalers – those vast, cloud-shaped entities that quietly control more of our lives than most monarchs ever dreamed of – are starting to realize this. They’re no longer just demanding faster spells; they’re demanding bigger, colder dungeons to cast them in.

Enter Applied Digital (APLD +8.49%). Now, the name sounds suspiciously like something a wizarding accountant would come up with, but they’re not brewing potions (at least, not that we know of). They’re building data centers. Not just any data centers, mind you, but ones specifically designed to handle the insatiable hunger of the AI gods. And, if you’ll permit a moment of uncharacteristic optimism, they might just be onto something.

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Applied Digital has, with a degree of foresight that would impress even a particularly shrewd goblin, secured contracts for a substantial amount of data center capacity. We’re talking nearly 600 megawatts across their Polaris Forge campuses in North Dakota.1 That’s enough power to… well, it’s a lot of power. Roughly $16 billion in prospective lease revenue over the next 15 years, they claim. A bold claim, you say? Perhaps. But they’ve already leased a good chunk of it to CoreWeave, a name that sounds suspiciously like a villain in a low-budget fantasy novel, and an unnamed “investment-grade” hyperscaler. Which, translated from corporate-speak, means “someone very, very rich.” This predictability, this glimpse into the future, is a rare and valuable thing in a world governed by chaos and quarterly earnings reports.

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What’s truly impressive is their ambition. Polaris Forge 1 and 2 are designed to scale, to grow. They can handle at least a gigawatt of total capacity each, and potentially more, depending on the availability of power and infrastructure. They’ve even started work on Delta Forge 1, a 430-megawatt campus. This isn’t just building boxes; it’s laying the foundations for a future where data is king, and cooling systems are the royal guard.2 It suggests a confidence, a willingness to invest in the long term, that is sadly lacking in many of today’s corporate behemoths.

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The numbers, while never the whole story, are… encouraging. In the second quarter of fiscal 2026 (ending Nov. 30, 2025), revenue soared 250% year-over-year to $126.6 million. The Wall Street consensus predicts about $346.7 million in fiscal 2026 and roughly $546 million in fiscal 2027. Now, I’m not a fortune teller (though I did once correctly predict the price of turnips), but that looks like a rather healthy trajectory. Of course, projections are just that – projections. But in a world of smoke and mirrors, a little bit of concrete data is a welcome sight.

So, is Applied Digital a guaranteed path to riches? Let’s be realistic. Turning $1,000 into $1 million would require a 1,000% return, and that’s a tall order. But, considering the tailwinds, the strategic positioning, and the sheer, unadulterated need for AI infrastructure, I believe it’s a possibility. It’s a calculated risk, of course. All investments are. But in a world increasingly dominated by algorithms and automation, investing in the foundations of that world seems… prudent. It’s not just about making money; it’s about shaping the future. And, frankly, that’s a future I’d like to see built on something a little more substantial than hot air.

1 Megawatts, for the uninitiated, are units of power. Think of them as magical energy units, but measured in a less exciting way.

2 The proper cooling of these facilities is crucial. Overheating can lead to… unpleasantness. Let’s just say you don’t want your data center to resemble a dragon’s lair.

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2026-01-24 21:12