Dallas, May 20, 2026, 16:04 CDT
- Applied Digital has locked in a 15-year lease for 300 MW of AI data-center space at its fourth site, Polaris Forge 3.
- Applied Digital said the agreement pushes its total contracted baseline revenue up to $31 billion over four campuses.
- Shares climbed after hours, but analysts remain fixated on valuation, power delivery, and construction risks.
Applied Digital on Wednesday said it has signed a 15-year take-or-pay lease with the same unnamed U.S. investment-grade hyperscaler already leasing at its Delta Forge 1 campus. The deal adds 300 megawatts of critical IT load at a new Polaris Forge 3 site, lifting contracted capacity for the Dallas-based company past 1 gigawatt. The lease, which requires the customer to pay whether or not it uses the full capacity, is worth about $7.5 billion over the base term.
Applied Digital has signed a deal as investors remain focused on companies turning AI infrastructure into real, contracted revenue instead of just forecasts. The company said the lease pushes its contracted baseline revenue up to $31 billion across four AI Factory campuses. If customers pick up renewal options, that total would reach $73 billion. AI Factory refers to Applied Digital’s high-power data-center sites built for AI training and inference work.
The news arrives as big cloud firms still lack enough power-ready sites. Back in April, Reuters said that Microsoft, Google and Oracle were spending billions to lock up sites with the compute and cooling needed for AI.
Applied Digital plans to build the Polaris Forge 3 data center in a northern U.S. state. The project will cover over 600 acres and take about 430 MW from the grid, aiming for 300 MW of computing power. The company said it expects to start initial operations in August 2027.
Applied Digital CEO Wes Cummins described the facility as part of a “disciplined, repeatable AI Factory model.” He said the company is selling over 1.7 GW of extra utility power tied to its latest and current sites. About 65% of contracted revenue now comes from U.S.-based investment-grade hyperscalers, the company said. Applied Digital Corporation
Applied Digital shares jumped after the news. The stock gained roughly 7% in after-hours, Investing.com said, and was last seen at $39.52, up about 8% from the prior close, according to market data.
Zacks, in a note earlier Wednesday, said Applied Digital and Microsoft both get a lift from AI infrastructure demand, but gave the edge to Microsoft. That’s due to Azure’s global reach, broader AI monetization potential and a cheaper forward sales multiple. Both stocks got a Zacks Rank #3, or Hold. Zacks has Applied Digital at 13.56 times forward sales versus 8.26 times for Microsoft.
Applied Digital finished spinning off its cloud business into ChronoScale earlier this month, keeping around 97% of shares in the newly listed company. The move separates its long-term data center hosting deals from its shorter-cycle cloud compute business.
Applied Digital says the projects still need more capital and time. As of Feb. 28, it had $2.1 billion in cash, cash equivalents and restricted cash, but $2.7 billion in debt. Fiscal third-quarter revenue jumped 139% to $126.6 million. The net loss attributable to common stockholders grew to $100.9 million.
Investors are returning to the same risk questions. Zacks pointed to execution risks like utility approvals, getting substations built on schedule, and having enough power. Applied Digital also said in its release that it sees risks from possible construction delays, financing, key customer reliance, and power interruptions.
Applied Digital still has a big lease and an even bigger backlog. The main issue now is building on time, with power and cooling ready, as costs may rise or the market could weaken, making those contracts look less attractive.
