Applied Digital Exceeds Revenue Expectations Amid AI Data Center Demand; Shares Rise

• Revenue of $126.6 million far exceeded analyst estimates of $88 million for the fiscal second quarter ended November 30
• Company secured long-term leases with two hyperscalers across North Dakota campuses, including a 200 MW agreement at its Polaris Forge 2 facility
• Applied Digital is spinning off its cloud business to merge with Ekso Bionics, forming ChronoScale, while retaining 97% ownership as it transitions to a data center REIT

Summary: Applied Digital Exceeds Revenue Expectations Amid AI Data Center Demand

Key Financial Performance:

Applied Digital reported Q2 fiscal 2026 revenue of $126.6 million for the quarter ended November 30, significantly surpassing Wall Street estimates of $88 million. The strong results drove shares higher as the company capitalized on surging AI infrastructure demand.

Business Developments:

The data center operator is benefiting from robust demand for large-scale facilities capable of handling AI workload requirements for model training and deployment. The company has secured billions in long-term leases, including a major agreement with a U.S.-based hyperscaler for 200 MW capacity at its Polaris Forge 2 campus in North Dakota. Applied Digital now has lease agreements with two hyperscalers across two North Dakota campuses.

Strategic Positioning:

CEO Wes Cummins highlighted the company's "first-mover advantage" in the Dakotas region, citing the area's cool climate and abundant energy as key attractions for hyperscalers. The company emphasizes its technical expertise in executing complex data center construction projects as a competitive differentiator.

Corporate Restructuring:

In December, Applied Digital announced plans to spin off its cloud business to merge with Ekso Bionics, creating an AI-focused company called ChronoScale. Applied Digital will retain 97% ownership while transitioning toward becoming a data center real estate investment trust (REIT).

Market Implications:

The results underscore the continued strong demand for AI infrastructure from hyperscale customers, validating the significant capital investments in data center capacity. Applied Digital's outperformance suggests accelerating AI adoption and infrastructure buildout across the industry.