Here are 1-2 brief analogies to describe Applied Digital (APLD):

• Like a highly specialized Amazon Web Services (AWS) or Microsoft Azure, purpose-built to power the most demanding AI computation and Bitcoin mining operations.
• They are a data center company, similar to Equinix, but specifically designed and operated for the intensive power demands of artificial intelligence and Bitcoin mining.

• High-Performance Computing (HPC) Data Center Co-location: They provide specialized data center infrastructure, including power, cooling, and network connectivity, for customers running high-performance computing workloads such as artificial intelligence, machine learning, and blockchain applications.
• Bitcoin Mining: They engage in self-mining Bitcoin and provide hosting services for other cryptocurrency miners within their data centers.
• GPU Cloud Services (NeutronPro): They offer on-demand access to high-performance graphics processing units (GPUs) for complex computational tasks, primarily for AI and machine learning applications, through their cloud platform.

Applied Digital (APLD) primarily sells its services to other companies (B2B) rather than directly to individuals. The company specializes in providing high-performance computing (HPC) solutions, data center infrastructure, and cloud services, particularly for Artificial Intelligence (AI) and large language model (LLM) applications.

Due to confidentiality agreements common in the data center and AI infrastructure industry, the specific names of many of Applied Digital's major current customers in the AI/HPC sector are not publicly disclosed.

However, the most significant announced customer for its strategic AI/HPC business is:

• An Undisclosed Large Language Model (LLM) Company: This customer has entered into a substantial 5-year, $180 million contract with Applied Digital for high-performance computing services. While the name of the company remains confidential, it represents Applied Digital's largest publicly announced contract within its strategic AI/HPC segment, highlighting a major revenue source for the company.

Historically, Applied Digital also provided hosting services for large-scale Bitcoin mining operations. While their strategic emphasis has significantly shifted towards AI/HPC, a notable past customer in the cryptocurrency mining sector included:

• Marathon Digital Holdings (MARA): Marathon was a significant customer for Applied Digital's Bitcoin mining hosting services in the past.

• Otter Tail Power Company (subsidiary of Otter Tail Corporation, symbol: OTTR)
• Montana-Dakota Utilities Co. (division of MDU Resources Group, Inc., symbol: MDU)

Wes Cummins, Chairman and Chief Executive Officer

Wes Cummins co-founded Applied Digital and serves as its Chairman and CEO. With over 20 years of experience as a technology investor, he possesses a strong background in capital markets, having worked at investment banks and institutional asset management firms. He founded and is the CEO of 272 Capital LP, an investment advisory firm that concentrates on technology hardware, software, and services companies. His career also includes leading technology investing at Nokomis Capital. Cummins started Applied Digital as a public company and has a background in public market investing, focusing on small-cap technology companies, particularly in tech hardware. In 2020, he was involved in the crypto ecosystem, specifically with Bitcoin miners, before transitioning to building high-performance data centers for AI workloads. He also serves on the board of Sequans Communications S.A.

Saidal Mohmand, Chief Financial Officer

Saidal Mohmand is a seasoned finance executive who currently serves as Applied Digital's Chief Financial Officer, a role he officially took on as of October 15, 2024. Prior to this, he was the Executive Vice President of Finance at Applied Digital since September 2021, where he was instrumental in leading the company's financial strategy and capital market initiatives. Mohmand also holds the position of Director of Research at 272 Capital LP, an investment advisory firm specializing in technology hardware, software, and service companies. Earlier in his career, he was the Director of Research at GrizzlyRock Capital, a Chicago-based value-oriented long/short fund. He holds a B.B.A. in Finance and Accountancy from Western Michigan University.

Laura Laltrello, Chief Operating Officer

Laura Laltrello joined Applied Digital as Chief Operating Officer, bringing nearly 20 years of executive leadership experience. She is responsible for driving the company's strategic vision and overseeing all aspects of daily operations. Laltrello possesses deep expertise in data center operations, building technologies, and large-scale infrastructure projects. Before joining Applied Digital, she was the Vice President and General Manager of the Building Automation Services business at Honeywell International Inc. Her career includes a range of senior leadership positions where she has delivered transformative projects and services for global technology leaders, and she previously served as VP GM of Lenovo's DataCenter Services business.

Jason Zhang, Chief Strategy Officer & Co-Founder

Jason Zhang is a Co-founder and the Chief Strategy Officer of Applied Digital. He is an experienced technology sector investor, having founded Valuefinder in 2019, a firm that advises and invests in technology companies. From 2017 to 2019, he served as an investment analyst at Sequoia Capital, focusing on areas such as AI, blockchain, digital infrastructure, enterprise software, consumer products, and hardware. Prior to that, from 2015 to 2017, he analyzed technology investments at MSD Capital, Michael Dell's family office. Zhang earned a BA in Economics from Harvard University. He also previously served as Co-Founder and President of Applied Digital from January 2021 until January 2025.

Erin Kraxberger, Chief Marketing Officer

Erin Kraxberger serves as the Chief Marketing Officer of Applied Digital. She is recognized for her ability to align marketing strategies with business goals, enhance market presence, attract major industry players, and generate investor interest. With nearly two decades of experience in finance and marketing, she specializes in technology investments. Kraxberger also currently holds the position of Chief Operating Officer at 272 Capital LP. Her previous roles include Head of Marketing & Investor Relations at SCW Capital Management, and her background encompasses financial planning and investment banking.

Applied Digital (APLD) faces several key risks, primarily centered on its financial health, reliance on key customers, and the capital-intensive nature of its operations.

1. Financial Health and Capital Intensive Business Model: Applied Digital exhibits significant financial challenges, including a high debt-to-equity ratio of 2.19, raising concerns about its financial stability. The company has a negative price-to-earnings (P/E) ratio and substantial profitability challenges, with an operating margin of -31.26% and a net margin of -165.02%. Its current ratio of 0.70 suggests potential liquidity issues, as it may not have sufficient current assets to cover current liabilities. The company's rapid expansion into AI-focused data centers demands substantial financing, making it a capital-intensive business heavily reliant on external funding. This strategy places pressure on cash flow and increases dependence on debt and equity financing, which in turn carries the risk of dilution for investors. Applied Digital recently priced a $2.35 billion offering of senior secured notes to fund new facilities and refinance existing obligations, further increasing its leverage.
2. Dependence on Key Customers and Execution Risk: A significant portion of Applied Digital's business and its ability to service debt relies on long-term leases with principal customers, particularly hyperscalers. For instance, the company heavily depends on CoreWeave as a main tenant, which has expanded its lease to the entire 400 megawatts at the Polaris Forge 1 campus. While these contracts provide revenue visibility, they also introduce customer concentration risk. The company's model requires flawless execution of these long-term leases, including the timely completion of data center construction, power delivery, and tenant ramp-ups. Any delays or shifts in hyperscaler demand could significantly strain cash flows and impact profitability.
3. Market Volatility and Competitive Pressures: Applied Digital operates in a highly competitive and rapidly evolving digital infrastructure space, competing with established players like Equinix and Digital Realty Trust. The company also faces risks related to rapid technological changes and evolving AI and high-performance computing (HPC) infrastructure needs. The stock itself has demonstrated high volatility, with a beta of 4.56, indicating significant sensitivity to broader market movements. Recent sharp declines in share price have been attributed to market-wide pullbacks from high valuations in the AI infrastructure sector, highlighting investor sensitivity to aggressive valuations and capital-heavy strategies.

The intense and rapidly consolidating competitive landscape within the AI/High-Performance Computing (HPC) cloud services market. As Applied Digital pivots more heavily into this sector, it faces significant challenges from well-capitalized hyperscale cloud providers (e.g., AWS, Azure, Google Cloud) and specialized, highly funded AI infrastructure companies (e.g., CoreWeave) that are securing massive allocations of advanced GPUs and scaling their operations at an unprecedented pace. These competitors possess superior financial resources, broader market reach, deeper technical expertise, and established customer bases, making it increasingly difficult for APLD to effectively compete for large-scale AI workloads and secure a sustainable market share.

Applied Digital (APLD) primarily operates in the digital infrastructure sector, focusing on high-performance computing (HPC) and data center hosting, including services for artificial intelligence (AI) and cryptocurrency mining.

Addressable Markets for Applied Digital's Main Products and Services:

• High-Performance Computing (HPC) and AI Data Centers:
  • The global high-performance computing market was estimated at approximately USD 57.00 billion in 2024 and is projected to reach approximately USD 87.31 billion by 2030, growing at a CAGR of 7.2% from 2025 to 2030.
  • More specifically for AI infrastructure, the global AI infrastructure market was valued at USD 47.23 billion in 2024 and is projected to reach approximately USD 499.33 billion by 2034.
  • In the U.S., the HPC market generated a revenue of approximately USD 17.91 billion in 2024 and is expected to reach approximately USD 28.43 billion by 2030, growing at a CAGR of 7.8% from 2025 to 2030.
• Data Center Hosting (General):
  • The global data center market size was estimated at approximately USD 347.60 billion in 2024 and is projected to reach approximately USD 652.01 billion by 2030, growing at a CAGR of 11.2% from 2025 to 2030.
  • The United States data center market size is estimated at approximately USD 114.48 billion in 2025 and is expected to reach approximately USD 158.55 billion by 2030, at a CAGR of 6.73%.
• Cryptocurrency Mining Hosting:
  • The global cryptocurrency mining market was valued at approximately USD 4.66 billion in 2024 and is projected to grow to approximately USD 14.09 billion by 2035, representing a CAGR of 10.57%.
  • The global Bitcoin miner market specifically was valued at approximately USD 11.19 billion in 2024 and is projected to reach approximately USD 94.14 billion by 2033. North America, particularly the U.S., is a significant contributor to this market.
• AI Cloud Services (through Sai Computing):
  • Although Applied Digital has recently indicated a strategic shift and plans to sell its Cloud Services Business, these services fall within the broader AI and HPC market. Therefore, the addressable market would be encompassed within the figures provided for the High-Performance Computing (HPC) and AI Data Centers.

Applied Digital (APLD) is anticipated to drive future revenue growth over the next 2-3 years through several key initiatives:

1. Expansion of AI/High-Performance Computing (HPC) Data Center Infrastructure: Applied Digital is rapidly expanding its data center capacity tailored for AI and HPC workloads. This includes the full operationalization of its Polaris Forge 1 campus, which is fully leased for 400 MW, and the ongoing construction and scaling of Polaris Forge 2, designed to reach one gigawatt in capacity. The Ellendale HPC campus is also progressing with plans for substantial expansion.
2. Growth in Cloud Services and GPU Cluster Deployment: The company's cloud services business is a significant driver, with revenue growth primarily from cloud services contracts. Applied Digital has deployment plans for additional GPU clusters in the second half of fiscal year 2025, supported by amended lease financing for GPUs, which is expected to fuel continued expansion.
3. Long-Term Lease Agreements with Hyperscalers: Securing and expanding long-term lease agreements with major technology companies, particularly hyperscalers, is a critical revenue driver. A significant example is the expanded AI computing lease agreement with CoreWeave, which brings the total contracted revenue to approximately $11 billion over 15 years for 400 megawatts of capacity at its Polaris Forge 1 campus. The company is also actively negotiating with additional investment-grade hyperscalers.
4. Revenue from Tenant Fit-Out Services: Applied Digital has been generating substantial revenue from tenant fit-out services associated with its HPC hosting business. This work involves installation and customization to prepare data centers for customer use, and it is expected to contribute significantly to revenue as new facilities come online and customers are onboarded.
5. Monetization of Extensive Development Pipeline: The company has an active development pipeline of 4 gigawatts and is exploring monetizing over 1.4 gigawatts of pipeline offers, which represents substantial growth potential through new site expansions and lease negotiations. Applied Digital aims to achieve $1 billion in annual net operating income within the next three to five years.

Applied Digital (APLD) Capital Allocation Decisions (Last 3-5 Years)

Share Repurchases

• In November 2024, Applied Digital completed a $450 million convertible senior note offering, which included $84 million allocated for share repurchases. These repurchases included $31.3 million in privately negotiated transactions and a $52.7 million prepaid forward stock repurchase.

Share Issuance

• Stockholders approved an increase in the authorized common stock to 600,000,000 shares in November 2025.
• Stockholders approved an amendment to the 2024 Omnibus Equity Incentive Plan to increase shares authorized for issuance under the plan by 15,000,000 in November 2025.
• In September 2024, Applied Digital entered into definitive agreements for a $160 million private placement financing, issuing 49,382,720 shares of common stock at $3.24 per share.

Inbound Investments

• In April 2025, Applied Digital announced a strategic partnership with Macquarie Asset Management, which will invest up to $5 billion to support the development of Applied Digital's next-generation data centers, with an immediate commitment of $900 million.
• In April 2025, the company secured a $375 million financing arrangement with Sumitomo Mitsui Banking Corporation, a global leader in data center financing.
• In September 2024, the company received a $160 million private placement financing from a group of institutional and accredited investors, including NVIDIA and Related Companies.

Capital Expenditures

• Applied Digital reported capital expenditures of $154 million for Q4 2025.
• For fiscal Q1 2024, the purchase of property, equipment, and other assets was $32.6 million, primarily driven by the construction of HPC hosting data centers.
• The company aims to expand its data center capacity to over 2 gigawatts, with plans for 1.6 gigawatts of additional capacity by 2026-2027, and the initial development cost for one new campus is projected to be approximately $3 billion.