Applied Digital’s revenue skyrocketed 407% in the last fiscal quarter, hitting $258.7 million as AI data center demand revolutionized its business model. The company’s total revenue for fiscal 2026 reached $611.3 million, more than doubling compared to the previous year. This dramatic shift away from cryptocurrency mining infrastructure towards AI-optimized data centers, dubbed “AI Factories,” is redefining their growth trajectory.

From Crypto Rigs to AI Powerhouses

Originally built around hosting crypto mining operations, Applied Digital now operates data centers designed to support intensive AI workloads, including large language models. While their crypto hosting segment still contributes $37.3 million in Q4 revenue from 286 megawatts of capacity in North Dakota, the real driver is their AI-focused facilities. These centers are purpose-built for high-performance computing, positioning the company at the center of the AI data boom.

Massive Contract Pipeline and Future Outlook

The company has secured about $20 billion in multi-year leases with a single investment-grade hyperscaler, representing 810 megawatts of contracted capacity. Total contracted IT load is 1.4 gigawatts, translating into $36 billion in revenue over 15 years, with a potential lifetime value of $86 billion if renewals are included. This pipeline reflects enormous confidence from major players in Applied Digital’s AI infrastructure.

One notable tenant, CoreWeave, a GPU cloud computing company public since earlier this year, holds a leasing deal backed by a $50 million letter of credit after refinancing, underscoring financial stability in the AI hosting segment. Applied Digital also spun off its cloud services into ChronoScale (Nasdaq: CHRN), maintaining majority ownership, further diversifying its AI-related businesses.

Applied Digital recorded adjusted EBITDA of $107.2 million for fiscal 2026. However, the concentration of contracts with a single hyperscaler and considerable use on their balance sheet present potential risks moving forward. Their expansion exemplifies how former crypto infrastructure providers are rapidly repositioning to meet surging AI demand, a trend also reflected in other industry moves like Meta’s partnership with BlackRock on AI data center projects.

This article is for informational purposes and does not constitute financial advice.