Is Applied Digital stock a buy right now?

In a Jan. 5 earnings preview, Roth Capital Markets analyst Darren Aftahi said the upcoming fiscal Q2 2026 results from Applied Digital Corporation (Applied Digital Corporation Stock Quote, Chart, News, Analysts, Financials NASDAQ:APLD) are likely to be driven more by execution milestones and leasing commentary than near-term financials.

Aftahi maintained his “Buy” rating and $56.00 price target.

Aftahi said investor focus should be on Applied’s progress converting energized capacity into signed leases, following the ramp-up of Polaris Forge 1, which now has 100 megawatts operational. He also pointed to the recently announced Macquarie-backed development facility, which provides less dilutive capital to fund campus buildouts ahead of leasing, as a positive step in accelerating growth.

Management’s proposal to separate its AI Cloud platform through the ChronoScale transaction further sharpens Applied’s positioning as a pure-play data centre infrastructure landlord, Aftahi said.

“If repeated across sites, we believe APLD can resemble scaled digital infrastructure developers with more predictable cash flows and improving tenant mix,” he said.

Near term, Aftahi expects the shares to be driven by lease announcements, funding updates and progress on energization timelines at Polaris Forge 1 and Polaris Forge 2, rather than quarterly earnings noise. Over time, he said, those milestones should translate into recurring lease revenue as customer installs come online.

Applied recently brought two 50-megawatt halls online at Polaris Forge 1 and announced a development facility with Macquarie that includes about $45-million initially drawn, plus additional capacity to support early-stage site work before leases are finalized. Aftahi said the structure improves Applied’s ability to advance projects while negotiating with hyperscaler tenants, including what the company has described as advanced talks with another investment-grade customer.

The proposed ChronoScale spinout would separate Applied’s discontinued AI Cloud operations from its data centre ownership and development business, with Applied expected to retain roughly a 97% stake. Aftahi said the move improves transparency, reinforces capital discipline and supports the company’s focus on long-duration, infrastructure-backed cash flows.

For fiscal Q2 2026, Aftahi models revenue of about $108-million, driven largely by non-recurring technical fit-out revenue, with an Adjusted EBITDA loss of roughly $1-million. He expects margins to improve materially in the back half of fiscal 2026 as lease revenue begins to scale.

He forecasts Applied will generate about $309-million in revenue and $38-million in Adjusted EBITDA in fiscal 2026, improving to roughly $615-million of revenue and $370-million of Adjusted EBITDA in fiscal 2027.

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