Applied Digital sees revenue surge amid AI data center boom

Applied Digital is experiencing significant growth driven by the high demand for artificial intelligence computing. The company, which builds and rents out data centers, reported a 407% revenue surge to nearly $260 million during its fourth quarter of fiscal year 2027. Projections suggest continued expansion, with revenue expected to grow by 37% in 2027 and 127% in fiscal year 2028 as new construction sites become operational.

Despite this growth, the company remains unprofitable due to the high capital requirements of data center construction. Applied Digital currently holds a market capitalization of approximately $8 billion. While the company faces risks associated with its lack of profitability and debt-to-equity ratio of 2.88, market analysts maintain a consensus price target of $68.15, with an average rating of 'Moderate Buy'.