Applied Digital rises after posting massive Q2 sales beat, with management in “advanced discussions” to add another hyperscaler client

Applied Digital is up 4.7% in premarket trading as of 8 a.m. ET, after the AI data center operator shared better-than-expected Q2 2026 results on Wednesday evening while saying it’s in “advanced discussions” to add a major hyperscaler client, with the potential for fresh leases to be signed early this year.

For the quarter ended November 30, 2025, Applied Digital posted revenues of $126.6 million, up 250% from the year before and some way ahead of the $84.1 million analysts had expected, per estimates compiled by Bloomberg. Profitability greatly improved too, with adjusted EBITDA of $20.2 million and adjusted net income coming in at $100,000 for the quarter.

Leasing deals with companies like CoreWeave, which has signed deals for facilities that represent approximately $11 billion in prospective (and now current) revenue, has boosted the business, with CFO Saidal Mohmand saying that the company has “one of the strongest balance sheets in the industry.”

This marked the quarter in which Applied Digital booked a $5 billion 15-year AI factory lease with a “US based investment grade hyperscaler.”

During the conference call, CEO Wes Cummins said that the company is in “advanced discussions” on three sites that represent 900 megawatts in total, with “another investment-grade hyperscaler across multiple regions.”

In a longer-term view, Applied Digital also indicated that it now expects to exceed its net operating income target of $1 billion in the next five years, per its press release:

“Applied Digital positioned itself early through strategic investments in purpose-built, next-generation data centers. Our initial hyperscaler customers are expected to expand within our existing campuses, while additional customers are anticipated across new sites. This strong demand across our campuses, together with our current expectation for additional leases leads us to expect that we will now exceed our $1 billion NOI target within the next five years.”

At the end of last year, Applied revealed plans to spin off its digital cloud computing business, combining it with EKSO to form ChronoScale Corporation, a compute platform purpose-built to support AI.

“Our view on the quarter was quite positive with the company talking up consistent strong customer demand, its execution track record so far, and near term lease possibilities alongside the longer term pipeline expansion opportunities,” wrote Needham analyst John Todaro, who has a “buy” rating and a $41 price target on the stock.