Applied Digital Stock Jumps 10% on $7.5B AI Hyperscaler Lease

Key Takeaways

Applied Digital signed a 15-year lease for 300 MW at its Delta Forge 1 campus with a U.S. hyperscaler.

The lease agreement represents approximately $7.5 billion in total contracted value.

Total contracted lease revenue for the company now exceeds $23 billion across its portfolio.

The company is pursuing $600 million in credit facilities to fund data center construction and working capital.

Applied Digital (NASDAQ: APLD) has entered into a lease agreement with a U.S.-based investment-grade hyperscaler for 300 megawatts (MW) of critical IT load. The agreement, which carries an estimated 15-year term, represents approximately $7.5 billion in total contracted value. The capacity is located at the company's Delta Forge 1 campus, a 430 MW facility designed for artificial intelligence and high-performance computing workloads.

The Delta Forge 1 campus spans more than 500 acres and is engineered to support high-density power delivery and cooling for both AI training and inference tasks. This agreement marks the company's second U.S.-based investment-grade hyperscaler across its three AI Factory campuses. With this addition, Applied Digital's total contracted lease revenue has increased to more than $23 billion.

The company reports that more than 50% of its total contracted revenue is now backed by investment-grade customers. This lease further diversifies the company's customer base, which now includes three hyperscale tenants. Initial operations at the Delta Forge 1 campus are scheduled to begin in mid-2027.

In addition to the lease agreement, Applied Digital is arranging up to $600 million in new credit facilities. This includes a $300 million senior secured bridge facility intended to fund the continued development of the 150 MW Building 3 data center at its Polaris Forge 1 campus. The bridge facility is expected to be provided by a syndicate of bank lenders.

The company is also seeking a $300 million senior secured revolving credit facility. These funds are designated for pre-lease and post-lease development activities across the Applied Digital platform, as well as for general working capital and transaction expenses. The facilities are expected to close following the completion of customary market terms.

Applied Digital Stock Jumps 10% on $7.5B AI Hyperscaler Lease

Key Takeaways

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