Applied Digital Corp shares climbed sharply in morning trading, rising 9.3% after the company revealed a long-term lease with a U.S.-based investment-grade hyperscaler for 210 megawatts of critical IT load at its Delta Forge 2 campus. The arrangement is a 15-year, take-or-pay contract that Applied Digital says will produce approximately $5.2 billion in base-term contracted revenue, and could expand to roughly $12.7 billion if every renewal option is exercised, extending the relationship to a potential total term of 30 years.
The announcement, which had already pushed the stock higher in after-hours trading the evening before, represents the third long-term lease Applied Digital has signed with the same unnamed hyperscaler and marks the company’s fifth AI Factory campus under long-term contract.
Deal context and company positioning
The Delta Forge 2 lease supplements a recent string of corporate moves. Applied Digital previously disclosed the closing of a $550 million revolving credit facility arranged by Goldman Sachs and reported a memorandum of understanding with AI cloud provider CoreWeave for a lease assignment at its Polaris Forge 1 campus. With the Delta Forge 2 agreement in hand, the firm said its total contracted portfolio now covers approximately $36 billion in base-term revenue across five campuses, with about 70% of that revenue supported by U.S.-based investment-grade hyperscalers.
Applied Digital’s chief executive emphasized the strategic intent behind the company’s approach. "Two years ago, we made a deliberate decision to build a company that scales, not just builds data centers," said CEO Wes Cummins, underscoring management’s focus on replicable franchise economics rather than one-off construction projects.
Market reaction and analyst views
The broader market backdrop was favorable on the same day, with the S&P 500 advancing 1.0%, the Dow Jones Industrial Average rising 0.9%, and the NASDAQ climbing 1.1%, reflecting persistent investor demand for AI-related infrastructure names. Analysts have maintained a bullish stance on Applied Digital; 11 analysts currently hold a Strong Buy consensus and the average 12-month price target sits near $67, implying additional upside from prevailing levels even after the intraday move.
In intraday trading, Applied Digital stock reached as high as $46.87, moving closer to its 52-week high of $50.73.
Why the announcement matters
- The lease secures a substantial, long-duration revenue stream under a take-or-pay structure, which provides predictable cash flow tied to the 210-megawatt commitment at Delta Forge 2.
- The transaction reinforces Applied Digital’s relationship with a repeat hyperscaler customer and increases the share of contracted revenue sourced from investment-grade U.S. hyperscalers to about 70% of the total portfolio.
- Recent financing activity and the CoreWeave memorandum of understanding combine with the new lease to expand the company’s secured revenue base to roughly $36 billion across its five campuses.
Bottom line
Taken together, the new hyperscaler lease, the freshly arranged credit facility, and positive market sentiment toward AI infrastructure stocks created a convergence of catalysts that drove Applied Digital shares higher in the session. The deal extends the company’s long-term contracted footprint and strengthens the recurring revenue profile that management has been building.