DALLAS, May 3, 2026, 16:05 CDT
- Applied Digital shares slipped on Friday, trimming some of the gains picked up after the late-April AI data-center lease news.
- The 15-year agreement locks in additional contracted revenue for the company, yet investors remain focused on the costs of expansion, debt load, and how well management can deliver.
- Big cloud customers still provide the main pillar for the stock, with Wall Street watching closely to see if AI infrastructure spending actually converts into lasting revenue.
Applied Digital Corp dipped 2.04% to close at $33.55 on Friday, with traders sizing up the recent surge in the AI data-center name against uncertainties around expansion expenses and timelines. Shares swung between $35.15 and $33.30 through the session, and roughly 17.04 million shares changed hands.
This is notable: Applied Digital has emerged as a closely tracked player among the smaller firms riding the AI infrastructure wave. The Dallas outfit isn’t just pitching an AI boom narrative—it’s working to convert lengthy lease deals into operational data-center space. That means wrestling with power, cooling, and financing hurdles, all of which have to align for the plan to work.
The spark here: back on April 23, the company disclosed a 15-year, approximately $7.5 billion lease deal with a new U.S.-based investment-grade hyperscaler—a label for the heavyweight cloud and internet operators that scoop up massive blocks of computing power. This agreement covers 300 megawatts of critical IT load, the essential capacity reserved for servers and computing infrastructure, all at the Delta Forge 1 campus.
Applied Digital’s total contracted lease revenue now tops $23 billion after the deal, Reuters said, with over half of that figure coming from investment-grade tenants. The project’s site isn’t slated to see initial operations until the middle of 2027, meaning there’s a lengthy ramp-up ahead before the agreement generates full operating cash flow.
Applied Digital now counts “two U.S. based investment-grade hyperscalers” in its lineup, CEO Wes Cummins said in the company’s release. On the April earnings call, Cummins described hyperscalers as “as aggressive as we have ever seen them” in the hunt for high-performance AI data-center space. Applied Digital Corporation
The setup still looks strong. Last week, Reuters said Microsoft, Amazon, Alphabet, and Meta together were on track to pour over $600 billion this year into data centers and other AI infrastructure—spending that has been a tailwind for firms linked to power, cooling, semiconductors, and big compute hubs. Applied Digital is trying to carve out a niche in that supply chain, though it’s a smaller player relative to the giants moving the market.
Analysts are still mostly positive. Needham bumped its price target on Applied Digital to $48, up from $41, sticking with a “buy” after the lease announcement, according to MarketBeat. The firm did caution about the company’s negative earnings per share and the stock’s volatility. MarketBeat
Applied Digital’s numbers tell a muddled story. Fiscal third-quarter revenue surged to $126.6 million, a jump of 139% year-over-year, yet the company still booked a net loss to common stockholders of $100.9 million, or 36 cents per share. Adjusted EBITDA, which excludes interest, taxes, depreciation, and amortization, landed at $44.1 million.
Caution flags are flying over the balance sheet. Applied Digital wrapped up February with $2.1 billion in cash, cash equivalents and restricted cash, but that sits against $2.7 billion in debt. The company also raised $2.15 billion through a private offering of senior secured notes, targeting construction of 200 megawatts of critical IT load at the Polaris Forge 2 site in Harwood, North Dakota.
Beneath the headline figures sits a tougher problem: execution risk. The company itself has flagged several potential pitfalls—delays in data-center builds, power or equipment hiccups, shaky financing terms, or major tenants like CoreWeave falling short on lease commitments. For a business that only gets paid once sprawling facilities go live, these aren’t minor footnotes.
Competition is heating up. Investors now talk about CoreWeave, Nebius, and IREN in the same breath, all hunting for capital and each trying to lock down GPUs, power, and a steady stream of cloud clients. Applied Digital isn’t just another cloud outfit—it’s more of a landlord and builder rolled into one. That brings in the prospect of longer-term lease revenue, though the flip side is exposure: building costs, credit concerns, and financing hiccups come first, with the real payoff only further down the line.
