Applied Digital (NASDAQ: APLD) closed at $28.47 on July 14, 2026, yet every analyst price target sits above the market price—the lowest at $40 and the highest at $106 across 11 analysts polled by S&P Global, with an average of $73.36, according to data compiled by StockAnalysis in July 2026. The company reported fiscal third-quarter revenue of $126.6 million, up 139% year over year, driven primarily by its AI data center hosting business. The valuation gap stems from a dispute over how to value APLD's roughly $36 billion contracted lease backlog against a GAAP net loss of $100.9 million in fiscal Q3 2026 and a 47% one-year increase in share count. Bulls view APLD as a landlord with long-term contracted revenue; bears see a leveraged developer burning cash and issuing equity. Applied Digital designs, builds, and operates AI data centers—primarily in North Dakota—and leases capacity to hyperscalers on roughly 15-year contracts, a business model that has attracted both strong analyst support and approximately 77.2 million shares sold short, about 27% of shares outstanding, per MarketBeat data from June 2026.
Applied Digital Reports Fiscal Q3 Revenue Growth and Business Model
Applied Digital designs, builds, and operates purpose-built AI data centers—what the company calls AI Factories—primarily on cheap, abundant power in North Dakota, then leases that capacity to AI cloud providers and hyperscalers on roughly 15-year contracts. In fiscal Q3 2026 (ended February 28, 2026), total revenue reached $126.6 million versus $52.9 million a year earlier, per the company's 8-K filing with the SEC. Approximately $71 million of that increase came from the HPC hosting business: $44.1 million in base rent, $18.9 million in tenant fit-out services, and $8.1 million in power pass-through arrangements. Adjusted EBITDA was $44.1 million, while GAAP net loss widened to $100.9 million from $36.1 million a year earlier.
The physical buildout is running in parallel. ELN-02, the 100 MW facility at the Polaris Forge 1 campus, is complete and fully operational, and roughly 1,200 skilled craft professionals are advancing the next two 150 MW facilities simultaneously. At Polaris Forge 2 near Harwood, North Dakota, a 200 MW campus is under construction for a U.S.-based investment-grade hyperscaler under a lease worth approximately $5 billion over about 15 years, with a right of first refusal that could extend the campus to a full gigawatt, per the company's announcement. "We believe it begins to show what's possible from here as we continue to bring additional capacity online in the coming quarters," said Wes Cummins, Chairman and Chief Executive Officer, in the fiscal Q3 earnings release, noting that current results reflect only about one-tenth of what is operating or under construction.
CoreWeave Lease Assignment and Financing Developments
CoreWeave has leased the full 400 MW at Polaris Forge 1 across three agreements expected to generate roughly $11 billion in lease revenue over about 15 years, per company press releases. On June 5, 2026, Applied Digital signed a memorandum of understanding to assign the Building 3 lease to a CoreWeave subsidiary if that subsidiary achieves an investment-grade credit rating, according to company filings. On June 9, 2026, the company announced a $1.59 billion senior secured notes offering to fund the fourth Polaris Forge 1 building, per company filings.
CoreWeave itself absorbed Core Scientific in a $9 billion all-stock deal to bring more capacity in-house, which validates the asset class while reminding investors that the tenant can also become the competitor. The competitive set is converging on the same model: TeraWulf is seeking $3 billion in Google-backed debt for data centers, and Galaxy delivered its first 133 MW to CoreWeave at Helios. "The real constraint in this industry is execution, and our team continues to prove that large-scale, next-generation data centers can be designed, financed, and brought online faster and more efficiently than anyone thought possible," Cummins said when the Polaris Forge 2 lease was announced.
Analyst Price Targets and Market Positioning
Wall Street responded through June and July 2026 with a wave of raises. Northland Securities' Michael Grondahl lifted his target from $56 to $82 on June 17; Lake Street's Robert Brown went from $70 to $90 on June 9; Needham's John Todaro moved from $66 to $83 the same day; and Craig-Hallum's George Sutton reiterated a Buy on July 2, per analyst actions compiled by StockAnalysis. Every published rating is a Buy. The street-low target of $40 sits roughly 40% above the July 14, 2026 close of $28.47, while the street-high target of $106 implies 272% upside, and the average of $73.36 implies 158% upside, according to S&P Global data compiled by StockAnalysis in July 2026.
The bull case is a lease-coverage argument: take the roughly $36 billion in aggregate contracted lease revenue over roughly 15-year terms, set it against a market capitalization in the single-digit billions, and APLD trades at a fraction of its contracted backlog. Add adjusted EBITDA of $44.1 million in a quarter that captured only the first 100 MW of a contracted pipeline several times that size, and the bull case is essentially that the rent is signed, the buildings are rising on schedule, and operating leverage does the rest.
The bear case is a balance-sheet argument. GAAP net loss widened to $100.9 million in fiscal Q3 from $36.1 million a year earlier. The share count has grown 47.47% in one year, per StockAnalysis data, and management expanded its Series G convertible preferred commitment to $2 billion, a signal that dilutive, equity-linked funding remains a core tool. S&P-adjusted consolidated debt-to-EBITDA is projected to reach roughly 8x by 2028 once completion guarantees are counted, and close to 90% of the contracted backlog depends on two customers.
New York Imposes AI Data Center Ban in July 2026
In July 2026, New York became the first U.S. state to impose a ban on new AI data centers, as reported by CNBC, a landmark move driven by electricity prices and water use that pushed public sentiment sharply against hyperscale construction in constrained grids. Community backlash is not theoretical: a Meta data center's alleged contamination of a local water supply generated one of the most-upvoted technology stories of the month on Reddit, drawing over 14,000 upvotes.
Applied Digital sits on the winning side of this divergence. Its campuses are in North Dakota, where stranded wind power is abundant, politics are permissive, and the company's design targets a projected PUE of 1.18 with near-zero water consumption, per company specifications. Every jurisdiction that follows New York's lead tightens supply everywhere else, and long-dated leases signed on already-permitted land become harder to replicate at any price.
Fiscal Q4 Reporting and Lease Assignment Milestones
The fiscal fourth-quarter report is expected around late July or August, covering the quarter ended May 31, per typical company reporting schedules. The report should show HPC hosting rent stepping up again as ELN-02 revenue captures a full quarter and fit-out billings continue. The CoreWeave subsidiary lease assignment is pending the investment-grade condition being met, per the June 5, 2026 memorandum of understanding filed with the SEC. The Polaris Forge 2 right of first refusal on the additional 800 MW remains an option for the hyperscale tenant, per the company's announcement of the lease agreement.
FAQ
What is the APLD stock price prediction for 2026?
Across 11 analysts polled by S&P Global, the average 12-month price target for Applied Digital is $73.36, with a street-low of $40 and a street-high of $106, according to data compiled by StockAnalysis in July 2026. At the July 14, 2026 close of $28.47, that implies upside of 40% even in the most bearish published scenario, and 272% in the most bullish.
Why is APLD short interest so high?
About 77.2 million shares—roughly 27% of shares outstanding—are sold short, per MarketBeat data from June 2026. Shorts point to a widening GAAP net loss of $100.9 million in fiscal Q3 2026, a 47% one-year increase in share count per StockAnalysis data, up to $2 billion in convertible preferred funding, and projected adjusted leverage near 8x by 2028.
Who are Applied Digital's main customers?
CoreWeave leases the full 400 MW at Polaris Forge 1 under agreements worth about $11 billion, and a U.S.-based investment-grade hyperscaler signed a roughly $5 billion, roughly 15-year lease at Polaris Forge 2, per company announcements. Close to 90% of the company's roughly $36 billion contracted backlog is attributable to two customers, according to Zacks via TradingView in 2026.
