By Mackenzie Tatananni

Fiscal second-quarter earnings at Applied Digital broadly topped estimates, but one detail stood out as the data-center developer teased a lease with a new customer in 2026.

Applied Digital said late Wednesday that it was in "advanced talks" with an investment-grade hyperscaler, or a large cloud service provider, for a total 900 megawatts of power across three sites.

The company indicated there was the possibility of a finalized lease in early 2026, which Needham analyst John Todaro reads as a sign that the leases will likely be signed in phases.

Todaro noted that Applied Digital's quarterly results were in line with his estimates but significantly higher than Wall Street's for top-line metrics and adjusted earnings before interest, taxes, depreciation, and amortization. He reiterated a Buy rating and $41 price target on the shares.

On the back of a threefold increase in revenue, Applied Digital said it expected to surpass its $1 billion net operating income target within the next five years. Adjusted earnings came in at 0 cents a share, ahead of the 16-cent loss analysts were expecting, according to FactSet.

Shares rose 6.8% to $31.58 in premarket trading Thursday. Futures tracking the tech-heavy Nasdaq Composite pointed down 0.1%.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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January 08, 2026 08:34 ET (13:34 GMT)

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