TLDR
- Applied Digital stock rose 8.83% after announcing a 15-year, 210 MW lease with a major U.S. hyperscaler worth $5.2 billion in base revenue.
- The deal could extend to 30 years, potentially generating $12.7 billion in lifetime lease revenue.
- This is the third long-term lease with the same hyperscaler, bringing Applied Digital’s total contracted pipeline to roughly $36 billion.
- Fiscal 2026 revenue is estimated to have jumped ~96% year-over-year to $422 million.
- The stock has gained 282% over the past year, outpacing Nvidia’s 44% rise over the same period.
Applied Digital (APLD) surged 8.83% on June 15 after the company confirmed a major new long-term lease agreement with a U.S.-based hyperscaler. The stock was trading around $46.38, with an intraday high of $46.98.
Applied Digital Corporation, APLD
The deal covers 210 megawatts of cloud computing capacity over 15 years, with $5.2 billion in base lease revenue. If the customer exercises all renewal options, the contract could run 30 years and generate $12.7 billion in lifetime revenue.
This is the third long-term lease Applied Digital has signed with the same hyperscaler. The company now has contracts in place to build five AI factory campuses across its portfolio.
Combined, Applied Digital’s total contracted lease pipeline stands at roughly $36 billion in a base-case scenario. That figure could grow to $86 billion if all existing customers exercise their renewal options.
The move higher was not just about the deal. A broader tech rebound, driven by easing geopolitical tensions, gave the rally extra fuel. Analysts also lifted their price targets following the announcement.
Applied Digital’s business model centers on building dedicated AI data centers for hyperscalers and neocloud companies, then generating lease revenue by operating them. It’s a capital-heavy model, but one that creates long, visible revenue streams once contracts are signed.
Revenue Growth Accelerating Fast
Fiscal 2026, which ended last month, is estimated to have seen revenue jump 96% year-over-year to around $422 million. That growth rate is expected to accelerate further as the company converts its pipeline into operating campuses.
Analysts are projecting that trend to continue over the next several fiscal years, supported by the growing backlog of signed contracts.
The stock currently trades at around 35 times sales, which is elevated. But the pipeline size and contract durations give some justification to that multiple.
A Few Things to Watch
Applied Digital is still posting GAAP losses and is burning cash. The company carries heavy debt, and its long-term success depends on converting contracted revenue into real profitability before financing costs become a bigger problem.
Dilution is another factor investors are watching closely as the company continues to fund new campus construction.
That said, the contracted backlog with blue-chip hyperscale clients does offer something rare in this space: revenue visibility. Long-dated leases make future cash flows easier to model and could help Applied Digital secure cheaper financing for future builds.
Over the past year, APLD stock is up 282%, compared to Nvidia’s 44% gain over the same period. Year-to-date, the stock is up 74.14%.
The company’s current market cap sits at approximately $12.2 billion to $13 billion, depending on the session close.
The latest deal marks Applied Digital’s third contract with the same hyperscaler and brings the total number of AI factory campus contracts to five.
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