Applied Digital (APLD) Q4 FY2026: A $36B AI Data-Center Backlog vs $5B of Debt — Real Transformation [khAAQ46JT9n]
APLD (Applied Digital Corp.) reported Q4 FY2026 earnings on July 27, 2026. Applied Digital (NASDAQ: APLD) — a Dallas-based designer, builder, and operator of large-scale AI + HPC data centers — reported fiscal Q4 2026 (fiscal year ended May 31, 2026) after the close on July 27. This is a genuine transformation story: a company that was a crypto-mining host three years ago is now a hyperscale AI landlord with a contracted lease backlog of roughly $36 billion (up to $86B if all renewals are exercised) across ~1.4 gigawatts of critical IT load and five campuses. Q4 revenue from continuing operations was $258.7M, up 407% YoY, as the first Polaris Forge 1 AI data center came online. The GAAP net loss to common was $110.6M (-$0.39/share), but $116.8M of that was NON-CASH stock compensation (accelerated vesting tied to spinning off the cloud business into ChronoScale, Nasdaq: CHRN) — strip the one-timers and adjusted net income was actually POSITIVE at $12.9M (adj EPS $0.04), with adjusted EBITDA of $42.4M and net operating income of $39.9M. Full-year FY2026 revenue was $611.3M (+167%), adj EBITDA $107.2M, NOI $90.4M. The pivotal development: on top of CoreWeave, a brand-new HIGH-INVESTMENT-GRADE hyperscaler signed THREE separate 15-year take-or-pay leases (Delta Forge 1: 300MW/$7.5B; Polaris Forge 3: 300MW/$7.5B; Delta Forge 2: 210MW/$5.2B) worth ~$20B combined — a world-class credit choosing Applied Digital three times in a row, which materially de-risks the old single-tenant (CoreWeave) concern. The catch is the balance sheet and the build: total debt jumped from under $3B to over $5.1B in a single quarter (funded by $2.15B 6.75% + $1.59B 7.0% senior secured notes), against $1.6B cash and $1.7B equity, and the company must spend $10B+ MORE to build 1.4 GW, diluting shareholders along the way, with the big lease revenue not really flowing until 2027-2028. Today recurring base rent is only ~$44M/quarter. At ~$26.38 (mkt cap ~$7.5B, beta ~5.7, down from a $50.73 high), our negative-FCF Path-to-Profitability + Reverse-DCF frame lands a base-case fair value near $23 (bear ~$12 / bull ~$36) — roughly 13% BELOW the current price, meaning you're already paying at the high end of our base case for flawless execution. Our call: SPECULATIVE HOLD, 3/5 — a real, IG-backed backlog and a proven franchise model, but a stock that already embeds a perfectly executed, debt-funded build. Wall Street is overwhelmingly bullish — a Buy/Strong-Buy consensus with an average target north of $70 (range $36.50-$90), implying well over 100% upside — so we DIFFER, deliberately far more cautious, letting our disciplined reverse-DCF (which fully accounts for the debt, dilution, and build time) drive the call. Not financial advice. Here's the full breakdown: Is APLD a buy, hold, or sell after this quarter? Applied Digital (NASDAQ: APLD) is one of the most extraordinary transformation stories in the AI infrastructure boom — a company that hosted bitcoin miners three years ago and is now a hyperscale AI landlord with a $36 billion contracted lease backlog. In fiscal Q4 2026 (year ended May 31, 2026), revenue from continuing operations jumped 407% to $258.7M as its first AI data center came online. The headline $110.6M GAAP net loss (-$0.39) looks scary, but $116.8M of it was non-cash stock comp tied to spinning off the cloud business into ChronoScale — strip it out and adjusted net income was positive $12.9M, with $42.4M of adjusted EBITDA. The pivotal news: on top of CoreWeave, a brand-new investment-grade hyperscaler signed THREE 15-year take-or-pay leases worth ~$20B combined, choosing Applied Digital three times in a row and breaking the old single-tenant fear. Now ~1.4 GW is contracted for ~$36B (up to $86B with renewals). But the balance sheet is the tension: total debt leapt from under $3B to over $5.1B in one quarter, against $1.6B cash, and the company must spend $10B+ more to build it all — diluting holders, with the big rent not flowing until 2027-2028. At ~$26.38 (mkt cap ~$7.5B, beta ~5.7), our Path-to-Profitability + reverse-DCF lands a base-case value near $23 (bear ~$12 / bull ~$36) — about 13% below the price. Our call: SPECULATIVE HOLD, 3/5 — a real, IG-backed backlog wrapped in a valuation that already assumes flawless, debt-funded execution. Wall Street rates it a Buy with an average target north of $70; we DIFFER, deliberately far more cautious. Not financial advice. This Applied Digital Corp. (APLD) Q4 FY2026 earnings deep dive walks through the record print, the growth engines, margins and free cash flow, the balance sheet, the growth runway, and a full owner-earnings / DCF valuation — ending with a clear, price-aware call. 🎧 Also on Apple Podcasts & Spotify 🔔 Subscribe for earnings deep-dives → @ChargedAlpha | Call tracker: chargedalpha.com THE CALL: HOLD (3/5, A REAL, IG-BACKED $36B BACKLOG — BUT PRICED FOR FLAWLESS EXECUTION)