April 8 (Reuters) – Applied Digital on Wednesday beat estimates for quarterly revenue, driven by strong demand for its data center services from enterprises to support a boom in generative AI applications.
Shares of the Dallas, Texas-based data center operator rose about 2% in extended trading. The stock has risen 13% so far this year after it more than tripled in 2025.
Big tech and AI companies are racing to lock in power and data center capacity, signing long-term deals worth billions of dollars as demand for AI computing surges.
The rapid rise of AI is reshaping data center design, driving demand for facilities that can handle soaring power and cooling needs. The shift favors Applied Digital, which expects hyperscalers to pour more than $400 billion annually into infrastructure.
“We are also starting to see the earnings power of our platform come through, with a full quarter of revenue from our first building now recognized,” CEO Wes Cummins said.
Applied Digital’s first large-scale AI data center reached full operations at its initial 100 megawatt scale in November.
In 2025 alone, companies announced 17 major high-performance computing deals worth more than $70 billion, according to B. Riley Securities analysts, underscoring the scale of investment flowing into AI infrastructure.
In January, Applied Digital began construction of its Delta Forge 1 campus, a 300-megawatt data-center project across more than 600 acres in the southern U.S., with initial operations expected in mid-2027.
The company’s third-quarter revenue rose 139% to $126.6 million, compared with analysts’ estimates of $76.6 million, according to data compiled by LSEG.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Leroy Leo)
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