Applied Digital Holdings saw its shares jump in morning trading after announcing a landmark long-term lease for a new AI-focused campus.
The company reported a 15-year take-or-pay lease with a U.S.-based, high investment-grade hyperscaler for Polaris Forge 3, a campus sited in a northern state that will provide 300 MW of critical IT load intended for large-scale AI training and inference workloads. The base-term contracted revenue for the agreement is approximately $7.5 billion, with the potential to expand to $18.2 billion if all renewal options are exercised. The transaction was signed with the same undisclosed hyperscaler that previously committed to Applied Digital's Delta Forge 1 campus.
Applied Digital said the deal increases its total contracted lease revenue across four AI factory campuses to $31 billion, or $73 billion including all renewal options, and that the company has surpassed 1 gigawatt of contracted AI data center capacity. The announcement also included a company statement that the new deal "pushes total contracted lease revenue for APLD above $23 billion in base terms."
CEO Wes Cummins commented on the strategic role of the new campus, saying: "Polaris Forge 3 is a direct extension of what we’ve proven works: a disciplined, repeatable AI Factory model that delivers large-scale capacity to the world’s most demanding compute customers," and added that the second 300 MW lease with the same hyperscaler "reflects the confidence we’ve built through disciplined execution."
Market reaction was pronounced. The stock rose +13.6% in morning trading on the news, standing out as a company-specific mover while major U.S. equity benchmarks traded lower. The S&P 500, Dow Jones Industrial Average and NASDAQ were each down roughly 0.4-0.5% on the session, leaving Applied Digital as an outlier within the technology sector. The share price approached the company's 52-week high of $47.79 during the intraday move.
Analyst responses were swift and uniformly bullish. Needham raised its price target to $66 from $51 while maintaining a Buy rating. Citizens lifted its target to $60 from $40 and kept a Market Outperform rating. Lake Street increased its target to $70 from $55 and reiterated a Buy rating. The cluster of upgrades helped reinforce buying momentum heading into the regular trading session.
The company framed the new lease as a validation of its repeatable AI Factory approach, and the deal materially increased the visibility of its revenue profile. Applied Digital emphasized that its contracted lease revenue now sits at multi-billion-dollar levels across multiple campuses, and that more than half of that revenue is tied to investment-grade hyperscale tenants across multiple customers, according to the company disclosure.
What this means
The combination of a multi-billion-dollar take-or-pay agreement, an explicit CEO endorsement of the company’s execution model, and simultaneous analyst price-target revisions created a concentrated set of catalysts for the stock. Those elements drove a pronounced intraday rally for the shares even as broader market indices traded lower.
Market context
Applied Digital’s move was largely company-specific. With major U.S. indices trading down roughly 0.4-0.5%, the stock’s double-digit gain was not tied to a broader market rally but was instead driven by the lease announcement and subsequent analyst reactions.