Applied Digital (APLD) is positioned as critical infrastructure for AI giants, operating data centers specifically designed for AI workloads. The company recently announced plans to spin out its cloud business to focus purely on hyperscale data center infrastructure, aiming for a simpler business model and clearer growth trajectory. Recent financials show revenue surged 250% to $126.6 million, though gross margin declined to 20.5% due to newer facilities being in a ramp-up phase. Operating loss widened to $31 million, but net loss improved to $14.4 million due to favorable interest expenses. Management raised its guidance, now expecting operating income to exceed $1 billion within the next five years. Key growth catalysts include a potential third hyperscaler deal, which could add $5B-$10B to the backlog and significant annual revenue, and the Polaris Forge 2 campus coming online in 2026. Risks include power grid capacity constraints in North Dakota, which could delay revenue recognition, and a potential slowdown in hyperscaler capital expenditures, as APLD's thesis depends heavily on continued AI infrastructure spending. The stock currently trades around $37 with an analyst high target of $99, suggesting 165% upside.