Can Applied Digital's Power Strategy Accelerate its Next Growth Leg?

Applied Digital APLD is building its next growth phase around power infrastructure, which is becoming an increasingly important factor in AI data center deployment. As hyperscalers continue expanding AI workloads, access to reliable and scalable power is expected to play a larger role in data center site selection. APLD's strategy of securing utility-connected power capacity and developing campuses in energy-abundant regions could strengthen its position in the rapidly growing AI infrastructure market.The company's North Dakota campuses are expected to provide a competitive advantage through access to low-cost grid power, favorable cooling conditions and an established operating footprint. These factors may help APLD offer customers long-term efficiency benefits while supporting the economics of multi-year hyperscale leases. The company already has 1.2 gigawatts of critical IT capacity under contract and is actively marketing additional development sites with more than 3.5 gigawatts of utility-connected power capacity. As AI infrastructure demand rises, these assets could support future leasing activity and expand APLD's revenue base.Beyond securing existing power resources, APLD is seeking to support future power availability through its relationship with Base Electron, an independent power producer working with Babcock & Wilcox. The initiative is expected to add approximately 1.2 gigawatts of natural gas-fired generation capacity to the Dakotas grid. This grid-expansion approach aligns with the utility-connected infrastructure model preferred by many hyperscale customers.However, execution remains critical. Power projects require regulatory approvals, utility coordination and timely infrastructure development. The Zacks Consensus Estimate for APLD's fiscal 2026 revenues is pegged at $395.4 million, indicating 83.48% year-over-year growth. The company's ability to translate its power strategy into additional contracted capacity and new hyperscale leases will likely determine whether it can sustain its next leg of growth.APLD Faces Stiff CompetitionApplied Digital faces stiff competition from Vertiv Holdings VRT and nVent Electric NVT in addressing power and thermal constraints across AI infrastructure. Vertiv Holdings and nVent Electric operate equipment-vendor models that distribute risk across multiple customers, require less capital per megawatt and carry limited exposure to project-level delays or utility coordination timelines. Applied Digital's growth trajectory, unlike that of Vertiv and nVent Electric, remains directly tied to how effectively its utility-connected power pipeline converts into operational campuses and contracted hyperscale lease revenues.APLD’s Share Price Performance, Valuation & EstimatesApplied Digital shares have surged 61.6% year to date, outperforming the broader Zacks Finance sector’s decline of 11.2% and the Zacks Financial-Miscellaneous Services industry’s decline of 1.6%.APLD Stock’s PerformanceImage Source: Zacks Investment ResearchApplied Digital stock is trading at a forward 12-month price/sales of 14.45X compared with the broader sector’s 2.81X.APLD’s ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for fiscal 2026 loss is pegged at 68 cents per share, up by 16 cents over the past 30 days. Applied Digital reported a loss of 80 cents per share in the previous year.Applied Digital Corporation Price and Consensus Applied Digital Corporation price-consensus-chart | Applied Digital Corporation QuoteAPLD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks