New York, May 21, 2026, 11:03 EDT
- Applied Digital shares jumped roughly 17% early after the company announced a new 15-year AI data-center lease.
- The deal pushes contracted lease revenue to $31 billion. That figure jumps to $73 billion if companies take renewal options.
- Analysts lifted price targets. Execution, financing, and customer concentration are still seen as the key risks.
Applied Digital shares rose Thursday morning after the data-center company agreed to a $7.5 billion lease for a new AI campus. Investors are still putting money into stocks linked to artificial-intelligence infrastructure.
The stock traded at $46.42, up $6.90 for the day after hitting $47.46 earlier. About 18.7 million shares changed hands. Market cap was around $13.1 billion, market data showed. Gains came as SPY and QQQ, which track the S&P 500 and Nasdaq-100, were down in morning trading.
Why it matters now comes down to this: the deal gives the company another long-term tenant. That is key for a company whose value is tied more and more to its ability to lease out AI campuses, using its power and land. A “hyperscaler” refers to a large cloud-computing client like a major internet or cloud player; Applied didn’t identify the customer.
Applied said late Wednesday it signed a 15-year take-or-pay lease for Polaris Forge 3, the company’s fourth AI Factory campus. The deal means the customer pays whether it uses the full capacity or not. Polaris Forge 3 is set up for 300 megawatts of critical IT load and about 430 megawatts of total utility power.
Applied Digital Corporation the new contract lifts its total contracted baseline revenue to $31 billion for its four AI campuses. That number could jump to $73 billion if all renewal options are picked up. The company expects to launch its new campus in an unnamed northern state in August 2027.
Applied Digital chairman and CEO Wes Cummins said Polaris Forge 3 is built on what he called a “disciplined, repeatable AI Factory model.” He said “momentum continues to build” as Applied Digital markets over 1.7 gigawatts of grid-connected utility power at both current and new sites. Applied Digital Corporation
The new lease comes after an April deal at Delta Forge 1 for around $7.5 billion over 15 years. At the time, Reuters said the agreement boosted Applied’s role as a data center supplier for AI work. Amazon, Google, Meta, Microsoft, and Oracle are spending big on capacity and cooling for AI models.
Applied Digital got a new price target of $60 from Citizens, up from $40, with the Outperform call staying in place. The broker said Applied Digital had “rapidly strengthened its position as an AI infrastructure provider.” StockAnalysis picked up new price hikes, with Lake Street moving to $70 and Needham bumping to $66, both keeping Buy. TipRanks
The new lease gives some clarity on timing, an issue that has weighed on the stock. Needham’s John Todaro said after the April numbers that demand looked solid, but management flagged that utilities and new partners meant “longer time to lease signing than initially hoped.” Sherwood News
Applied isn’t the same kind of player as the data-center giants Equinix and Digital Realty, or as AI cloud operator CoreWeave, though earlier leases have linked it to CoreWeave. But the market move looks the same: investors like firms that line up power, put up buildings, and add capacity at the pace AI clients need. CoreWeave was up about 5% Thursday morning. Digital Realty and Equinix had smaller gains.
Applied’s fiscal Q3 brought some big increases. Revenue jumped 139% from a year ago to $126.6 million. Adjusted EBITDA came in at $44.1 million. Cash, cash equivalents and restricted cash totaled $2.1 billion, with $2.7 billion in debt on the books as of Feb. 28.
But the risks are easy to list. Applied still needs to finish its big campuses, line up financing, manage its power and equipment risks, and keep from relying too much on a handful of major customers. The company warns about construction timing, getting capital, customer concentration and possible power outages in its own filings.
Funding remains front and center for Applied. Earlier this month, the company closed a $300 million senior secured bridge facility with Goldman Sachs at the lead to support development at its Polaris Forge 1 campus. Applied said it plans to look for more financing to finish building out the site.
Investors for now see the new Polaris Forge 3 lease as evidence demand hasn’t gone away. The bigger challenge is next—delivering power, managing costs, and turning those huge contracts into consistent cash flow instead of just signing new deals.
