Applied Digital Corporation i(NASDAQ:APLD) is a next-generation digital infrastructure company that designs, builds, and operates high-performance computing data centers purpose-built for artificial intelligence, machine learning, and other advanced computing applications. Headquartered in Dallas, Texas, the company has positioned itself as a critical enabler of the AI revolution by providing scalable, energy-efficient, and cost-effective solutions for hyperscalers, enterprises, and other clients requiring massive computing power. Its facilities are strategically located in regions with abundant, low-cost energy and favorable climates, allowing Applied Digital to deliver competitive advantages in operational efficiency, sustainability, and speed to market.
Originally focused on cryptocurrency hosting, Applied Digital has successfully pivoted to become a key player in AI-focused infrastructure. The company’s flagship project, the Polaris Forge campus in Ellendale, North Dakota, is one of North America’s most ambitious high-performance computing data center developments. Designed to scale up to one gigawatt of capacity, the campus features advanced cooling systems, energy-efficient designs, and ultra-low-cost power sourcing, making it an ideal environment for AI workloads. Through long-term lease agreements with major AI infrastructure partners such as CoreWeave, Applied Digital has secured billions of dollars in contracted revenue, underscoring its role as a preferred provider of next-generation computing infrastructure.
Applied Digital’s business model is built on speed, scalability, and innovation. The company has reduced its data center construction timelines from 24 months to as little as 12 to 14 months, allowing it to meet the urgent demand from hyperscale AI clients more efficiently than traditional data center providers. This capability, combined with its expertise in designing liquid-cooled, high-density infrastructure, has positioned Applied Digital as a trusted partner for companies seeking to deploy large-scale AI and high-performance computing solutions. Its relationships with major hyperscalers and technology leaders have been reinforced by its ability to pass rigorous technical due diligence and deliver infrastructure that meets the most demanding industry standards.
Beyond its current projects, Applied Digital is pursuing a multi-gigawatt pipeline of new developments across the United States. The company has attracted significant institutional investment, including financing commitments from firms such as Macquarie Group, providing the capital required to execute its ambitious growth plans. By focusing on regions with affordable power and natural cooling advantages, Applied Digital has created a sustainable competitive edge in an industry where energy efficiency and cost savings are increasingly important. Its strategic vision, operational expertise, and strong partnerships position it to become a dominant force in the rapidly expanding AI infrastructure market.
Transformative CoreWeave Leases Cement Long-Term Growth Trajectory
A defining moment for Applied Digital came with the announcement of two long-term lease agreements with CoreWeave, an Nvidia-backed AI hyperscaler. These agreements will deliver 250 megawatts of IT capacity at the company’s Ellendale, North Dakota data center campus, known as Polaris Forge 1. The leases are expected to generate approximately $7 billion in contracted revenue over 15 years. In a major follow-up development, CoreWeave exercised its option for an additional 150 megawatts, increasing total leased capacity to 400 megawatts and total contracted revenue to an estimated $11 billion. These agreements not only de-risk Applied Digital’s long-term revenue streams but also validate its strategy of building purpose-designed data centers for artificial intelligence and high-performance computing applications.
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Polaris Forge 1 Emerges as a Flagship AI Data Center Campus
Polaris Forge 1 has quickly become one of North America’s most ambitious AI infrastructure projects. Designed to scale up to 1 gigawatt of power capacity, the campus is set to deliver unparalleled efficiency through innovative design elements, including a closed-loop, direct-to-chip cooling system that achieves a power usage effectiveness (PUE) of 1.18 and near-zero water consumption. The first 100 MW facility is expected to be operational in the fourth quarter of 2025, followed by a 150 MW facility in mid-2026 and a third 150 MW facility in 2027. According to Applied Digital, customers could save approximately $2.7 billion over a 30-year period by choosing this location compared to industry-standard data centers, thanks to the Dakotas’ abundant low-cost energy and favorable climate conditions that provide over 200 days of free cooling annually.
Operational Efficiency and Strategic Focus Drive Business Evolution
Applied Digital made the strategic decision to discontinue its Cloud Services Business during fiscal 2025, classifying it as held for sale and reflecting this change in its financial reporting. This move allows the company to focus exclusively on high-performance computing and data center hosting operations, particularly for AI workloads, which are experiencing unprecedented demand. CEO Wes Cummins emphasized that the company has streamlined its processes, enhanced its building designs for scalability and flexibility, and cut build times from 24 months to just 12 to 14 months. These improvements enable Applied Digital to deploy large-scale data center projects more quickly and efficiently, a critical advantage in a market where hyperscalers are racing to secure capacity.
Robust Financial Backing Enables Expansion and Stability
To support its rapid growth, Applied Digital raised $268.9 million following the end of the fiscal year through sales of common stock under its At-the-Market Sales Agreement and sales of Series G Preferred Stock. This capital infusion, combined with previously announced financing partnerships such as its deal with Macquarie Group, ensures the company has the resources to fund construction at Polaris Forge 1 and advance its multi-gigawatt development pipeline. The company also reported a significant reduction in interest expense, reflecting better capital structure management and the absence of related-party loans that previously increased financial costs.
HPC Data Center Hosting Business Shows Strong Momentum
Applied Digital’s HPC Data Center Hosting segment experienced meaningful growth, with revenue increasing 41% year-over-year in the fiscal fourth quarter to $38.0 million. The company’s Jamestown and Ellendale facilities, which provide energized space for crypto mining clients, operated at full capacity as of May 31, 2025. With Bitcoin prices reaching all-time highs, demand for these services remains strong, further supporting Applied Digital’s hosting revenues even as the company pivots to prioritize AI-focused operations. Management highlighted that the company has passed rigorous due diligence from leading hyperscalers, which bodes well for future partnerships and large-scale project wins.
Strategic Positioning for the AI Infrastructure Boom
Applied Digital’s focus on purpose-built infrastructure for AI and high-performance computing comes at a time when global demand for AI-capable data centers is surging. Hyperscalers like Microsoft, Amazon, and Google are spending billions to expand their AI infrastructure, creating a once-in-a-generation opportunity for specialized providers. By offering scalable, cost-efficient, and sustainable solutions, Applied Digital is uniquely positioned to capture a significant share of this market. Its ability to execute quickly and meet hyperscaler requirements gives the company a competitive edge in securing long-term, high-value contracts.
A Clear Path to Long-Term Shareholder Value
While Applied Digital is still in a net loss position, its rapid revenue growth, multi-billion-dollar contracted leases, and strategic capital raises paint a compelling picture of future profitability. The company’s adjusted EBITDA improvement, operational efficiency gains, and transformative CoreWeave agreements provide a strong foundation for long-term success. CEO Wes Cummins has expressed confidence that Applied Digital’s multi-gigawatt pipeline and strong relationships with hyperscalers will continue to fuel growth as AI adoption accelerates worldwide.
Conclusion: Applied Digital as a High-Conviction AI Infrastructure Play
Applied Digital’s fiscal 2025 results highlight a company in the midst of a transformative growth phase. With its pivot to high-performance computing, a flagship data center campus attracting multi-billion-dollar lease agreements, and a well-capitalized balance sheet, the company is strategically aligned with one of the most powerful technology trends of the decade. As the demand for AI-ready infrastructure continues to expand at breakneck speed, Applied Digital is emerging as a high-conviction investment opportunity for those seeking exposure to the future of computing.
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