So, you know that whole AI boom that everyone's talking about? It turns out building the physical homes for all that computing power is a pretty good business. Applied Digital Corp (APLD) just showed us exactly how good, delivering third-quarter results that blew past what Wall Street was expecting.

The digital infrastructure provider reported after the market close on Wednesday that it brought in revenue of $126.6 million for its fiscal third quarter. That's not just a beat—it's a demolition. Analysts, according to market data, were looking for about $76.56 million. The company's revenue shot up 139% compared to the same period last year, which it says was driven mainly by growth in its high-performance computing (HPC) hosting business.

On the bottom line, the story was just as positive. Applied Digital reported adjusted earnings of nine cents per share. Again, analysts had braced for a loss of 10 cents per share. So, not only did the company make money, it made more than anyone thought it would.

"We now operate one of the only 100 MW direct-to-chip liquid-cooled data centers online today, and more importantly, it is fully operational," said Wes Cummins, the company's chairman and CEO. He framed the company's value proposition in simple, practical terms: "We believe that's what matters to our customers — turning power into live AI capacity, delivered on time and performing as expected."

Cummins also noted that the company is starting to see the financial payoff from its investments, with "a full quarter of revenue from our first building now recognized." The company finished the quarter with a strong balance sheet, holding approximately $2.1 billion in cash, cash equivalents, and restricted cash, against $2.7 billion of total debt.

Building for an AI-Fueled Future

This isn't a company resting on its laurels. Applied Digital is in full-scale expansion mode, and it says construction is right on schedule across its campuses in North Dakota. One building, ELN-2 at a site called Polaris Forge 1, is now fully up and running. The next two 150-megawatt facilities are moving forward, and at another site, Polaris Forge 2, the foundations for both buildings are largely complete.

Perhaps most telling about the company's confidence in future demand is that it broke ground on a whole new location, Delta Forge 1, during the quarter. It expects that site to begin initial operations in mid-2027.

And why is it building all this? Because the customers are lining up. "We are seeing a clear acceleration in demand for high-performance AI data center capacity, with hyperscalers as aggressive as we have ever seen them," Cummins said. For those not steeped in tech jargon, "hyperscalers" are the giant cloud companies like Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL). When they get aggressive about needing more data center space, it's a very good sign for the companies that build it.

Investors seemed to like what they heard. After the earnings announcement, shares of Applied Digital were up 2.37% in after-hours trading, changing hands at $28.45. The company's executives are scheduled to discuss the results in more detail on an earnings call.