Shares of Applied Digital (APLD +21.51%) surged on Thursday after the next-gen data center builder announced another major lease agreement with a cloud titan.
Image source: Getty Images.
A blockbuster deal
Applied Digital is partnering with the same undisclosed hyperscaler that previously signed a $7.5 billion, 15-year lease for 300 megawatts (MW) of capacity at its artificial intelligence (AI) factory campus, Delta Forge 1, in April.
A hyperscaler is an enterprise-scale provider of cloud computing and related services. Amazon Web Services, Microsoft Azure, Alphabet‘s Google Cloud, and Oracle are some of the leading hyperscalers in the world today.
Today’s Change
(21.51%) $8.50
Current Price
$48.02
Key Data Points
Market Cap
$11B
Day’s Range
$42.30 – $48.57
52wk Range
$6.67 – $48.57
Volume
42M
Avg Vol
21M
Gross Margin
27.07%
This new 15-year lease is for Applied Digital’s fourth site, Polaris Forge 3. The deal also covers 300 MW of critical IT load, specifically designed for AI model training and inference workloads. It, too, is valued at roughly $7.5 billion.
Polaris Forge 3 spans over 600 acres and features Applied Digital’s proprietary waterless cooling technology and high-density power delivery. Operations are expected to begin in August 2027.
“Polaris Forge 3 is a direct extension of what we’ve proven works: a disciplined, repeatable AI factory model that delivers large-scale capacity to the world’s most demanding compute customers,” CEO Wes Cummins said.
A long runway for further expansion
With hyperscalers planning to spend $725 billion in capital expenditures in 2026 alone, Applied Digital has a massive market opportunity still ahead.
The data center designer’s total contracted lease revenue now checks in at $31 billion across four of its campuses — and up to $73 billion if its customers choose to renew under the terms of their existing leases.
“While executing leases representing 1.2 GW [gigawatts] in the past eleven months has been a monumental achievement, we are actively marketing more than 1.7 GW of grid-connected utility power across sites recently added to our portfolio, as well as existing sites,” Cummins said.
Joe Tenebruso has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Oracle. The Motley Fool has a disclosure policy.
