Key Highlights
- A 15-year lease agreement valued at approximately $7.5B was secured with a U.S. investment-grade hyperscaler for Applied Digital’s Delta Forge 1 campus.
- The agreement encompasses 300 MW of critical IT load dedicated to AI and high-performance computing operations.
- Applied Digital’s total contracted lease revenue has surpassed $23B, with investment-grade customers accounting for more than half.
- The company’s portfolio now includes three hyperscale tenants, featuring two U.S.-based investment-grade hyperscalers.
- Financing plans include up to $600M in new credit facilities to support continued development initiatives.
Shares of Applied Digital experienced a significant rally on Wednesday, climbing approximately 12% following the announcement of a substantial lease agreement with a U.S.-based, investment-grade hyperscaler for its Delta Forge 1 AI campus.
Applied Digital Corporation, APLD
The agreement secures 300 MW of critical IT load and carries an estimated value of $7.5 billion spanning a 15-year period. The facility will cater to AI training operations and high-performance computing requirements.
Delta Forge 1 occupies over 500 acres and remains in active construction. The campus is scheduled to commence initial operations during mid-2027.
This agreement represents Applied Digital’s second U.S.-based investment-grade hyperscaler within its AI Factory portfolio, elevating the total count of hyperscale tenants to three.
The company’s cumulative contracted lease revenue has now exceeded $23 billion. Investment-grade customers comprise more than 50% of this total.
CEO Wes Cummins characterized the agreement as “an important step in the continued diversification of our customer base,” noting that it enhances visibility into contracted revenue streams moving forward.
Financing Strategy
Applied Digital revealed intentions to establish up to $600 million in new financing arrangements. This includes a $300 million senior secured bridge facility designated for ongoing development of Building 3 at the Polaris Forge 1 campus, which accommodates a 150 MW data center.
Additionally, the company intends to establish a $300 million revolving credit facility to support pre-lease and post-lease development operations throughout its platform. Both financing arrangements are anticipated to finalize shortly through a consortium of banking institutions.
The Delta Forge 1 facility incorporates high-density power distribution systems and sophisticated cooling infrastructure. Applied Digital constructs its campuses following a standardized AI Factory framework optimized for large-scale training and inference operations.
Market Analysis
The latest analyst assessment for APLD indicates a Buy rating with a price target of $40.
TipRanks’ AI analysis assigns APLD a Neutral rating, recognizing robust technical momentum and a substantial contracted pipeline, while acknowledging continued GAAP losses, elevated leverage ratios, and negative free cash flow conditions.
Applied Digital maintains a market capitalization of approximately $8.95 billion.
The stock advanced roughly 12% during the trading session following the announcement.
