Shares of Applied Digital Corporation (APLD) are poised for a significant move higher at Tuesday's opening bell following the announcement of a massive long-term lease agreement. The data center developer revealed late Monday that it has secured a 15-year, 210-megawatt lease at its Delta Forge 2 AI-focused campus, valued at approximately $5.2 billion. This latest deal sent the stock up 8.7% in after-hours trading, according to Reuters, and sets the stage for what investors expect will be a strong regular session reaction.
The lease, structured as a take-or-pay agreement, requires the tenant to pay for the contracted capacity regardless of usage, providing Applied Digital with a stable and predictable revenue stream. The company's total contracted base-term lease revenue now stands at roughly $36 billion, a figure that swells to approximately $86 billion if all renewal options are exercised. This marks a significant milestone for Applied Digital, which has been under scrutiny to demonstrate its ability to convert power access and land parcels into long-term, high-value customer contracts.
While the customer's identity remains undisclosed, Applied Digital confirmed it is the same U.S.-based investment-grade hyperscaler that has now signed three long-term leases with the company. This repeat business underscores the growing demand for AI infrastructure capacity from leading cloud and internet operators. Notably, about 70% of Applied Digital's contracted revenue is now backed by investment-grade hyperscalers, a factor that bolsters the company's credit profile and investor confidence.
The financial picture is further strengthened by the simultaneous closing of a revolving credit facility of up to $550 million. The facility, which includes $350 million in committed funds and a $200 million accordion option, is designed to support pre- and post-lease data center development and working capital needs. Chief Financial Officer Saidal Mohmand described the credit line as providing "additional flexibility to advance our development pipeline," a crucial component given the capital-intensive nature of building AI-ready data centers.
Applied Digital's operational progress is also reflected in its fiscal third-quarter results, which showed revenue of $126.6 million—a 139% increase year-over-year—and adjusted EBITDA of $44.1 million. However, the company reported a net loss of $100.9 million attributable to common stockholders and ended February with $2.1 billion in cash and restricted cash against $2.7 billion in debt. These figures highlight that Applied Digital remains a construction and financing story, not merely a backlog story, and execution risk persists.
The broader market context provided a tailwind for the stock. The Nasdaq Composite rose 0.86% on Monday, buoyed by a rebound in chip stocks, with the Philadelphia semiconductor index surging 5.6%. Rick Meckler, partner at Cherry Lane Investments, characterized the move as "bargain hunting" following a significant tech selloff. Among peer AI-infrastructure names, CoreWeave was up 2.0% in early indications Tuesday, while Nebius declined 4.3%.
Despite the positive momentum, Applied Digital's risk factors remain. The company's filings warn that results could differ materially if customers fail to renew, construction faces delays, financing becomes harder to secure, power supply is disrupted, or regulatory changes occur. A delay at Delta Forge 2, where first operations are expected in the first quarter of 2028, would leave investors waiting longer for the revenue now being priced into the shares. For now, the stock move reflects growing confidence in Applied Digital's ability to convert scarce power and data-center sites into contracted AI capacity, with the next major test coming at Tuesday's market open.
