Nvidia's "Hidden Portfolio" Pick Crushes Earnings: Buy Now or Wait?

"Applied Digital ( NASDAQ:APLD ) just beat the pants off of Wall Street. The high-performance computing and artificial intelligence (AI) data center operator released its fiscal first-quarter 2026 earnings after markets closed yesterday, and reported revenue of $64.2 million, up 84% year-over-year, handily beating analyst estimates of around $50 million. Adjusted net losses of $7.6 million, or $0.03 per share, trounced expectations for a $0.13 per share loss."

"Key reasons for the stellar performance came in the form of $26.3 million from AI-driven tenant fit-outs for high-performance computing clients like CoreWeave ( NASDAQ:CRWV ), plus gains in data center hosting amid strong crypto demand. Adjusted EBITDA turned positive at $0.5 million, leading shares to surge over 22% in morning trading today, reflecting investor enthusiasm for Applied's AI leasing momentum. But with the stock racing ahead, have investors missed the boat?"

"Applied Digital designs, builds, and operates data centers optimized for demanding applications in AI, machine learning, blockchain, and high-performance computing (HPC). The company splits into two main segments: data center hosting, which provides colocation services for crypto mining and other workloads, and HPC Hosting, focused on purpose-built facilities for AI factories. Facilities like Jamestown and Ellendale in North Dakota run at full capacity - 286 megawatts (MW) total - leveraging low-cost power and efficient designs to serve clients needing massive compute power."

Applied Digital reported fiscal Q1 2026 revenue of $64.2 million, an 84% year-over-year increase, and posted adjusted net losses of $7.6 million, or $0.03 per share, outperforming expectations. The company recognized $26.3 million from AI-driven tenant fit-outs for high-performance computing clients such as CoreWeave and benefited from stronger data center hosting demand tied to crypto. Adjusted EBITDA turned positive at $0.5 million, and shares rose over 22% in morning trading. Applied Digital operates data center hosting and HPC Hosting segments, runs 286 MW at full capacity, uses liquid cooling with PUE as low as 1.18, and deploys GPUs via Sai Computing.

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