Can Applied Digital's AI data-centre growth drive further gains?

Benchmarks Nifty22,447.75-155.3FEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return19.49 % Invest NowEnter search text: Powered By Can Applied Digital's AI data-centre growth drive further gains?Written by Anupam Nagar, ETMarkets.com|Oct 08, 2026, 11:21:04 AM IST1/6

​Applied Digital: AI data-centre bet gains momentum

Applied Digital delivered a strong fiscal Q1 2027 performance, with revenue surging 322% year-on-year to $341.9 million. The company benefited from continued growth in demand for AI-focused data-centre infrastructure, while its adjusted loss narrowed sharply from the year prior. (Sources: Applied Digital, Investing.com, Simply Wall St)

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​Revenue soars 322%

Applied Digital's revenue jumped to $341.9 million from $80.9 million a year earlier. Tenant fit-out services contributed $183.5 million, while base rent revenue reached $65.8 million. Adjusted EBITDA also rose sharply to $64.4 million from just $0.5 million in the year-ago quarter.

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​AI infrastructure pipeline expands

Applied Digital continues to expand its AI infrastructure footprint. Polaris Forge 1 has reached 250 MW of live capacity, while the company has leases covering around 1.41 GW of critical IT load. These agreements represent approximately $36 billion in contracted revenue over their initial terms.

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​Finland expansion opens European opportunity

Applied Digital has secured access to up to approximately 1 GW of potential power capacity in Finland, marking an important step in its international expansion. The first 100 MW is expected to become available in 2028, with the site being positioned as a potential large-scale European AI campus.

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​Rapid growth comes with heavy investment

Despite strong revenue growth, Applied Digital remains loss-making as it invests heavily in expanding its data-centre infrastructure. The company reported a GAAP net loss attributable to common shareholders of $221 million, compared with a loss of $18.5 million a year earlier, highlighting the capital-intensive nature of its expansion strategy.

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​AI demand drives long-term growth story

Applied Digital is positioning itself to benefit from the growing demand for AI computing capacity. Its long-term contracts, expanding US data-centre footprint and planned Finland campus provide significant growth opportunities. However, the company faces risks from heavy capital requirements and continued pressure on profitability.

(Disclaimer: This slideshow is based on inputs from agencies. These do not represent the views of The Economic Times.)

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