Applied Digital Corp (NASDAQ:APLD) stock rallies 16% (As on January 8, 11:26:49 AM UTC-4, Source: Google Finance) after the company reported fiscal second quarter revenue that more than tripled YoY, easily surpassing analyst expectations as its high-performance computing business gained momentum. The strong performance was driven by the company’s High-Performance Computing (HPC) Hosting Business, which contributed $85 million in quarterly revenue, including $73 million from tenant fit-out services and $12 million from rental revenue as its first building at Polaris Forge 1 became fully operational. The Data Center Hosting Business added $41.6 million, up 15% YoY. Further, the company ended the quarter with $2.3 billion in cash, cash equivalents, and restricted cash, $5.2 billion in total assets, $3.2 billion in liabilities, and approximately $2.1 billion in temporary and stockholders’ equity, with the majority of its debt not maturing until 2030. It recently completed a $2.35 billion senior secured private notes offering and has drawn $900 million under its preferred equity arrangement with Macquarie Asset Management. Applied Digital also announced plans to spin out its Cloud business and combine it with EKSO Bionics Holdings to form ChronoScale, with Applied Digital expected to retain over 80% ownership of the combined entity upon closing.

Moreover, Applied Digital has secured significant long-term contracts, including a 400 MW agreement with CoreWeave at Polaris Forge 1 representing approximately $11 billion in prospective lease revenue, and a 200 MW lease with an investment-grade hyperscaler at Polaris Forge 2 worth approximately $5 billion over its 15-year term. During the quarter, Polaris Forge 1 reached Ready-for-Service, delivering 100 MW on schedule and fully energizing the first building (ELN-02). This marks the completion of the first of three contracted buildings at the campus and represents a significant milestone in the 400 MW AI Factory buildout for CoreWeave. As a result, CoreWeave paid approximately $85.0 million this quarter, including $73.0 million for tenant fit-out activities, and Applied Digital recognized $12.0 million in partial-quarter lease revenue. Additionally, the legacy data center hosting business contributed over $41.6 million in revenue.

APLD in the second quarter of FY26 has reported breakeven adjusted earnings per share, beating the analysts’ estimates for the adjusted loss per share of $0.12. The company had reported the adjusted revenue growth of 250 percent to $126.6 million in the third quarter of FY26, missing the analysts’ estimates for revenue of $86.67 million.