Applied Digital (APLD 3.93%) stock shot up impressively in 2025. Even better, it has got off to a flying start in the new year as well. Shares of the company are up nearly 56% already in 2026 as of this writing, and its latest results suggest that they could continue soaring throughout the year.
Let's take a closer look at Applied Digital's most recent quarterly report and check why this artificial intelligence (AI) data center specialist has room to deliver more gains to investors in the new year.
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Applied Digital could continue outpacing the market's growth expectations
Applied Digital released its fiscal 2026 second-quarter results (for the three months ended Nov. 30, 2025) on Jan. 7. The company reported a 250% year-over-year increase in revenue to $126.6 million, crushing the consensus estimate of $88 million by a big margin.
Applied Digital designs, builds, and operates dedicated AI data centers for hyperscalers and neocloud providers such as CoreWeave. The company is currently building two data center campuses in North Dakota with a combined power capacity of 600 megawatts (MW). The good part is that it has already sold out this data center capacity to CoreWeave and another unnamed hyperscaler.
These two customers are expected to generate $16 billion in lease revenue for Applied Digital over 15 years. Importantly, the company has already started generating lease revenue from its first 100 MW data center. Applied Digital anticipates its lease revenue to ramp up over the next 18 to 24 months as it readies the remaining capacity under construction for service.
However, don't be surprised to see Applied Digital bringing more customers on board during this period. As pointed out by CEO Wes Cummins on the latest earnings call:
Having secured two hyperscale leases in the region, inbound demand has increased meaningfully. As a result, we are in advanced discussions with another investment-grade hyperscaler across multiple regions, including additional locations in the Dakotas and select southern U.S. markets.
Cummins added that Applied Digital is well-positioned to start the construction of additional data center campuses in the near term, if it secures more contracts. Applied Digital also points out that it can quickly build and deploy data centers by using prefabricated components and running multiple concrete plants. The shorter construction timelines could eventually help it bring more clients on board as the demand for AI data centers is set to outpace supply in the U.S. in the coming year.
NASDAQ: APLD
Key Data Points
Goldman Sachs estimates that data center capacity in the U.S. will fall behind demand by an average of 10 GW every year through 2028. So, Applied Digital could get more contracts to build data center capacity in 2026. That could allow it to maintain its terrific growth rate as it will be able to generate more revenue from the outfitting of data centers for its clients. At the same time, the lease revenue ramp-up in the coming months should act as another catalyst for the company.
Investors can expect terrific upside from the stock in 2026
Applied Digital has a 12-month median price target of $42.50, according to 14 analysts covering the stock, with all the analysts rating it as a buy. That points to a potential upside of 13% from current levels, indicating that this AI stock could still move higher. However, Applied Digital could easily clock bigger gains than that.
The following chart shows how much revenue Applied Digital is expected to deliver in the current and the next two fiscal years.
Data by YCharts.
The company's revenue in the first six months of the current fiscal year stands at almost $191 million, putting it on track to easily exceed the market's expectations for fiscal 2026. The consensus revenue estimate for the next fiscal year points toward a 57% potential jump in its top line, a figure that Applied Digital can easily exceed based on the points discussed in the previous section.
So, don't be surprised to see Applied Digital stock exceeding analysts' median 12-month price target in 2026 and trade closer to the Street-high price target of $99, which is more than 2.5 times its current stock price.
