DALLAS, May 26, 2026, 08:03 CDT
- Applied Digital signed its fourth big AI data-center lease, raising its total contracted baseline revenue to $31 billion.
- The deal is another shot for investors to see if long-term AI infrastructure contracts can balance the high costs of building out.
- Wall Street has raised its targets. But there are still big risks with financing, construction timelines, and customer concentration.
Applied Digital landed a 15-year lease at its Polaris Forge 3 campus, making the Dallas data-center developer the latest focus in Wall Street’s AI infrastructure bets. The deal brings in $7.5 billion in base-term contracted revenue, pushing its total baseline contracted revenue up to $31 billion.
Shares looked set to open near $45.87 on Tuesday, according to market data, following a steep rally tied to bets on firms able to supply electricity to data centers supporting AI workloads.
Timing is key here as Applied Digital isn’t just seen as a speculative data-center builder anymore. The company is lining up long-term leases with big cloud players—hyperscalers—at the same time investors are questioning if those deals will actually produce steady cash flow after the campuses are finished.
Applied Digital said the lease for Polaris Forge 3 includes 300 megawatts of critical IT load at a new campus in a northern U.S. state. The agreement is with the same U.S.-based investment-grade hyperscaler that signed for Delta Forge 1 in April. Investment grade here means the customer has strong credit.
Applied Digital said its take-or-pay deal means the customer pays for reserved capacity, used or not. The company put the value of the lease at up to $18.2 billion if renewals are picked up. Its four AI Factory campuses now have 1,200 megawatts of contracted IT load.
Applied Digital CEO Wes Cummins said “Momentum continues to build” in the company’s statement, noting the firm is now marketing over 1.7 gigawatts of grid-connected utility power at its new and existing sites. Applied Digital Corporation
Applied Digital’s latest deal comes after an April lease at Delta Forge 1, also valued at $7.5 billion across 15 years. At that point, Reuters noted Applied Digital’s contracted lease revenue jumped past $23 billion. Amazon, Microsoft, and Oracle had been ramping up spending to secure data-center space, power, and cooling for AI projects around the same time.
Applied Digital got quick target hikes after new customer news. Lake Street’s Rob Brown boosted his price target to $70 from $55, calling it a “premium platform position,” according to The Fly via TipRanks. Needham also moved, taking its target up to $66 from $51 after being caught off guard by how fast the customer took more capacity. TipRanks TipRanks
Citizens boosted its price target on Applied Digital to $60 from $40, citing the company’s improved standing as an AI infrastructure player after landing a fourth 300-megawatt deal with a top-credit client. StockAnalysis lists the Wall Street average target at $58.60, with 10 analysts still at “Strong Buy.” TipRanks StockAnalysis
Applied Digital moved fast. Fiscal third-quarter revenue jumped 139% to $126.6 million, but net loss to common shareholders also grew to $100.9 million. The company finished the quarter holding $2.1 billion in cash and equivalents, against $2.7 billion in debt.
Financing is still at the center of things. Applied Digital wrapped up a $300 million senior secured bridge facility this month led by Goldman Sachs, backing ongoing work at Polaris Forge 1 in Ellendale, North Dakota. CFO Saidal Mohmand said the goal is to match funding to project timelines but keep the option open to switch to longer-term financing later.
Applied Digital has spun off its cloud business. On May 5, the company said it finished separating the unit as ChronoScale, now trading with the ticker CHRN. Applied Digital kept about 97% of ChronoScale. Cummins said the move points to risk differences between data-center hosting contracts, which are longer term, and cloud compute, which runs on shorter cycles.
Execution is the main risk. Applied Digital still needs to build out big campuses, lock in enough power, raise or refinance capital, and keep its biggest customers on board through a long AI cycle. The company says itself that actual results could end up different from what it’s expecting—citing possible delays in construction, issues with financing, power problems, shifts in AI infrastructure, and its dependence on key hyperscaler clients.
Valuation puts some pressure on Applied Digital’s story. As of May 25, Barchart said shares were up 87.07% for the year and 513.24% in twelve months, with the stock trading at 37.34 times trailing sales—well over the sector median. The balance now: a larger contracted backlog, but investors are paying up given how much of the AI infrastructure play is already priced in.
