Applied Digital (APLD) Unveils US$3 Billion AI Factory Expansion In North Dakota

On August 18, 2025, Applied Digital Corporation (APLD) announced the development of Polaris Forge 2, a significant AI infrastructure project near Harwood, North Dakota, which could align with the company's stock price rising by 143% last quarter. Alongside this business expansion, the company reported an improvement in Q4 financial metrics, such as a reduced net loss and increased sales year-over-year. These developments contrast with broader market trends, as big tech saw declines and major indexes rose less substantially over the last year, indicating that APLD's unique growth drivers are key differentiators for its stock performance.

Be aware that Applied Digital is showing 3 possible red flags in our investment analysis and 1 of those doesn't sit too well with us.

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The recent announcement of Polaris Forge 2 by Applied Digital Corporation is poised to further influence the company's positioning within the AI infrastructure landscape. This development aligns with the company's strategic push into AI hyperscaler contracts, potentially enhancing revenue growth and margin expansion. Over the past five years, APLD's total shareholder return has been very large, underscoring substantial long-term value creation against the recent industry hurdles. In the last year specifically, APLD outperformed both the US Market, which saw a 15.8% return, and the US IT industry, which had a 14.9% return, highlighting the company's resilience and unique growth catalysts.

The initiatives in AI infrastructure, propelled by long-term leasing agreements with CoreWeave, could amplify future revenue pipelines and earnings forecasts. The projected revenue growth of 46.9% annually, driven by strategic site locations and efficient building processes, suggests robust demand. Earnings forecasts, indicating a profitable turn over the next three years, reveal anticipated margin improvements. With the current share price at US$16.34, close to the analyst consensus price target of US$17.22, the market appears to be cautiously optimistic, recognizing the risks yet acknowledging the growth potential inherent in APLD's strategic initiatives. Investors are encouraged to balance these perspectives, considering both the earnings forecasts and price target alignment, in forming a comprehensive view.

Learn about Applied Digital's future growth trajectory here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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