Applied Digital continues aggressive capital spending to expand hyperscale custom GPU and compute infrastructure globally.

Applied Digital continues an aggressive capital spending program as it expands its AI data center footprint across multiple campuses. The company is simultaneously developing five AI Factory campuses, including Polaris Forge 1, Polaris Forge 2, Delta Forge 1, and Delta Forge 2. Construction of a fourth building at Polaris Forge 1 has already begun before the third building reaches full utilization. On July 1, 2026, Applied Digital placed Phase 1 of the second building at Polaris Forge 1 into service, adding 75 megawatts of operational capacity and bringing the campus to 175 megawatts of live capacity. This remains well below the 400 megawatts already leased to CoreWeave under long-term agreements, leaving more than half of the contracted capacity yet to contribute recurring lease revenue.

To support this infrastructure expansion, Applied Digital continues to rely on project-level financing rather than internally generated cash flows. The company raised $1.59 billion through senior secured notes due 2031 to fund the fourth building at Polaris Forge 1, following an earlier $300 million bridge facility for the same project and a $2.15 billion senior secured notes offering for Polaris Forge 2. An additional debt tranche remains to be placed for Polaris Forge 1, suggesting financing requirements are likely to remain elevated as construction progresses across its development pipeline. Applied Digital's adjusted EBITDA was $44.1 million in the fiscal third quarter, while total debt stood at approximately $2.7 billion at the quarter's end. The pace of capital deployment continues to outstrip current operating cash generation, leaving the company's expansion strategy heavily reliant on external financing.

Applied Digital competes with IREN Limited and TeraWulf in expanding AI infrastructure to serve hyperscale customers. Like Applied Digital, IREN continues investing in high-performance computing capacity, while TeraWulf is expanding its digital infrastructure through AI-focused data center projects. However, compared with IREN and TeraWulf, Applied Digital is pursuing a broader multi-campus expansion strategy, resulting in larger upfront capital commitments and greater reliance on external financing as new capacity is brought online.

Applied Digital shares have surged 34.8% year to date, outperforming the broader sector's 9% decline. The stock is trading at a forward 12-month price-to-sales of 12.06X, compared with the sector's 2.81X. The Zacks Consensus Estimate for fiscal 2026 loss is 70 cents per share, unchanged over the past 30 days, compared with an 80 cent loss per share in the previous year. The company carries a Zacks Rank #5 (Strong Sell) rating.