Applied Digital Corp. (APLD) has inked a massive 15-year lease valued at approximately $7.5 billion with an undisclosed U.S. hyperscaler, securing 300 megawatts of critical IT load at its Delta Forge 1 campus. This deal propels the company's total contracted lease revenue past the $23 billion mark, as disclosed in an April 23 filing and press release.
The Build-Out Challenge
While the lease represents a significant revenue milestone, the real test lies in execution. The company must now convert these contracted megawatts into operational data centers by mid-2027, when the first phase of Delta Forge 1 is slated to come online. The race to build AI-ready infrastructure is intensifying among hyperscalers like Amazon, Google, and Microsoft, all of which are aggressively securing capacity for power-hungry AI chips.
Applied Digital's chairman and CEO, Wes Cummins, emphasized that the company remains focused on delivering operational AI capacity at scale. He noted that execution is paramount, with timely construction and operational readiness being critical to meeting market expectations.
Financial Snapshot and Market Reaction
Shares surged over 12% following the announcement, with the stock last trading at $35.09, giving the Dallas-based firm a market capitalization of roughly $9.9 billion. The company's fiscal third-quarter results showed revenue of $126.6 million, a 139% year-over-year increase. However, the net loss attributable to common stockholders widened to $100.9 million, while adjusted EBITDA came in at $44.1 million. As of quarter-end, Applied Digital held $2.1 billion in cash and equivalents against $2.7 billion in debt.
Expansion and Funding Needs
The new lease adds to the company's existing commitments. Applied Digital is building 400 MW of data-center capacity for CoreWeave and an additional 200 MW for another hyperscaler, with 100 MW for CoreWeave already completed. To fund ongoing construction, the company plans to secure up to $300 million through a senior secured bridge facility for Building 3 at Polaris Forge 1, along with a separate $300 million revolving credit facility for development and working capital.
This deal marks Applied Digital's third hyperscale customer and its second investment-grade tenant, a crucial factor given the heavy debt loads data-center operators often carry before facilities generate steady revenue.
Risks and Uncertainties
Despite the positive news, several risks loom. The company has flagged potential construction delays, customer lease choices, shifts in AI and high-performance computing demand, power availability issues, equipment failures, regulatory hurdles, and tight cash flow. The credit facilities are not yet finalized, adding another layer of uncertainty.
In a competitive landscape where big cloud players and specialized AI infrastructure firms are vying for capacity, Applied Digital's ability to deliver on its promises will be closely watched. The market's renewed interest hinges on whether the company can turn contracted megawatts into live, operating data centers on schedule.
