Shares of Applied Digital (APLD +12.09%) spiked on Thursday after the data center designer struck a lucrative deal with a cloud computing giant.
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Helping a cloud colossus scale
Applied Digital entered a 15-year lease with an unnamed U.S.-based hyperscaler at its 500-acre, 430-megawatt (MW) artificial intelligence (AI) factory, Delta Forge 1.
A hyperscaler is generally defined as a cloud services provider that offers enormous amounts of computing and storage capacity. Examples include Amazon Web Services, Microsoft Azure, and Alphabet‘s Google Cloud.
The agreement will see Applied Digital supply 300 MWs of AI and high-performance computing infrastructure. The contract could be worth up to $7.5 billion.
Today’s Change
(12.09%) $3.92
Current Price
$36.35
Key Data Points
Market Cap
$9.3B
Day’s Range
$34.58 – $37.27
52wk Range
$4.07 – $42.27
Volume
55M
Avg Vol
23M
Gross Margin
27.07%
This marks the second time Applied Digital has reached a deal with a U.S. hyperscaler. The data center builder’s total contracted lease revenue now stands at more than $23 billion.
“We remain focused on delivering operational AI capacity at scale,” CEO Wes Cummins said in a press release.
Purpose-built for AI
Applied Digital designed Delta Forge 1 specifically for large-scale AI computing. With its efficient power supplies and advanced cooling features, the massive data center campus is well-suited for both AI model training and inference workloads.
Applied Digital expects to begin initial operations at Delta Forge 1 in mid-2027.
“Our priority remains execution — bringing capacity online on schedule and operating it with discipline over the long term,” Cummins said.
Joe Tenebruso has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy.
