Applied Digital strengthens AI lease agreements and data center builds

• Applied Digital recently secured a multi-billion dollar long-term lease for AI data center capacity.
• The company has begun construction on a large new data center campus to support its growing AI workloads.
• Additional leases of new Polaris Forge 2 sites with major hyperscalers or AI cloud providers are described as imminent.

Applied Digital (NasdaqGS:APLD) is at the center of the growing demand for AI-enabled infrastructure, and its stock price is $34.95. The stock has returned 3.2% over the past week and 18.2% over the past month, and the very large gains in the one-year and five-year periods suggest that investors are closely monitoring the stock’s execution in the data center.

The combination of new long-term leases, new campus construction, and a potential Polaris Forge 2 deal will give investors more concrete data points to evaluate future recurring revenue. For anyone tracking AI infrastructure, these updates may help you think of Applied Digital less as a build story and more as a contracted capacity provider expanding relationships with major AI customers.

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How Applied Digital stands out from its biggest competitors

For Applied Digital, signing long-term leases for AI data centers and starting to develop new capacity puts it further in the same big capital race as giants like Amazon Web Services, Microsoft Azure, and Google Cloud, but with a pure focus on leased infrastructure rather than full-service cloud platforms. The $16 billion in contracted leases across 600 MW, combined with the 430 MW campus under development and the potential for hyperscaler contracts at Polaris Forge 2, will give investors greater visibility into the contracted usage of assets under construction.

How does this fit into the applied digital narrative?

These moves align closely with the existing narrative that Applied Digital is leveraging long-term contracts with CoreWeave and other hyperscalers to shift the story from speculative builds to contract tenants and become an AI-focused infrastructure landlord. The company’s focus on faster build times, power access in North Dakota, and large campus-scale projects reflects its bullish view as a specialty alternative to vertically integrated hyperscalers.

Risks and benefits investors are considering

• ⚠️ High leverage, with debt reported to reach USD 2.6 billion by November 2025, increases financing risk in case the project fails or financing costs rise.
• ⚠️ CoreWeave’s high dependence on a small group of large customers creates concentration risk if contract terms change or construction deadlines are missed.
• 🎁 Approximately USD 16 billion long-term lease agreement across multiple campuses provides visibility into potential recurring revenue if the project is delivered as agreed.
• 🎁 The bridging financing and PF2 lease trigger associated with the 200 MW suggests that management sees a clear path to converting another construction site into a contracted income producing asset.

What to watch next

Looking forward, key things to watch are execution milestones for Polaris Forge and Delta Forge 1, the final terms and size of the Polaris Forge 2 hyperscaler lease, and whether Applied Digital can grow its customer base beyond CoreWeave while keeping debt under control. If you’d like to see how different investors are interpreting these moves and the long-term story, check out Applied Digital’s community story on this dedicated page.

This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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