Applied Digital $APLD ( ▲ 8.05% ) jumped in early trading after the AI data center operator delivered a massive Q2 sales beat and said it’s in “advanced discussions” to add another hyperscaler customer, with potential new leases coming together early this year.
For the quarter ended November 30, 2025, Applied Digital reported revenue of $126.6 million, up 250% year over year and well ahead of the $84.1 million Wall Street expected. Profitability also improved sharply, with adjusted EBITDA of $20.2 million and adjusted net income of $100,000.
Hyperscalers driving the story
The growth is being fueled by long-term leasing deals with AI infrastructure players. Applied Digital said it booked a $5 billion, 15-year AI factory lease during the quarter with a U.S.-based investment-grade hyperscaler, marking a major milestone for the business.
Existing relationships, including large-scale leases with CoreWeave $CRWV, have helped strengthen Applied’s balance sheet and visibility. Management now says the company has “one of the strongest balance sheets in the industry.”
More capacity, more customers
On the earnings call, CEO Wes Cummins said Applied Digital is in advanced discussions with another investment-grade hyperscaler across three sites totaling roughly 900 megawatts of capacity. That pipeline is large enough to meaningfully reshape the company’s long-term earnings power if finalized.
Reflecting that confidence, Applied Digital said it now expects to exceed its $1 billion net operating income target within the next five years, driven by expansion at existing campuses and new site development.
What analysts are saying
Needham analyst John Todaro called the quarter “quite positive,” citing strong customer demand, solid execution, and a growing lease pipeline. He reiterated a buy rating on the stock with a $41 price target.
Taken together, the results reinforce Applied Digital’s positioning as one of the early winners in the AI data center land grab, with hyperscaler demand showing little sign of slowing.