AI infrastructure developer Applied Digital just locked in another multi-billion dollar contract with a mystery American hyperscaler, sending shares in the bitcoin miner-cum-AI infrastructure giant up 325% for the year so far.
The Dallas-based outfit announced a US$5 billion lease agreement with a U.S.-based investment-grade hyperscaler for 200 megawatts (MW) of AI compute capacity at its Polaris Forge 2 campus in North Dakota.
The 15-year commitment brings APLD's total infrastructure footprint across both North Dakota facilities to 600MW, up from zero at the start of 2024.
Shares jumped 7% in premarket trading on Wednesday before settling to close up 4%, extending a monster 325% rally year-to-date as investors pile into AI infrastructure plays.
The cloud giant also secured first right of refusal for an additional 800MW of rack space, representing the full 1-gigawatt expansion potential of Polaris Forge 2.
From Bitcoin miner to AI landlord
APLD has executed one of the sharpest pivots in tech, transforming from a struggling cryptocurrency mining operation into a hyperscale colocation developer in just under three years.
It's been busy the last couple of months, too, expanding its CoreWeave agreement in August, bringing total contracted bookings with the cloud computing unicorn to $11 billion.
The company also broke ground on the $3 billion Polaris Forge 2 site in September, backed by initial funding from Macquarie Equipment Capital.
The AI infrastructure business also secured a $5 billion preferred equity facility with Macquarie, providing capital to fund buildouts without excessive equity dilution.
Topline margins surged 84% year-over-year to $64.2 million in fiscal Q1. Announced on 9 October, the news sent shares rocketing 30% the following day as multiple analysts hiked price targets into the $37-$41 range.
The initial 200MW at Polaris Forge 2 will energise in 2026 and reach full utilisation in 2027, featuring proprietary waterless cooling and a projected PUE of 1.18.
Valuation concerns emerge
The ticker hit turbulence Tuesday, falling 8% on insider selling concerns and fears that APLD's stretched multiple - trading above 13x price-to-sales - leaves little room for execution missteps.
Analysts warn the company faces mounting competition from hyperscalers building their own infrastructure and established players like Equinix scaling AI-ready facilities.
The ambitious construction timeline and $20-25 billion capital deployment plans carry significant execution risk in a capital-intensive business with thin margins.
Applied Digital CEO Wes Cummins defended the strategy.
"The real constraint in this industry is execution, and our team continues to prove that large-scale, next-generation data centres can be designed, financed, and brought online faster than anyone thought possible.”
APLD was named Best Data Centre in the Americas 2025 by Datacloud and topped the Dallas Business Journal's Fast 50 list for rapid revenue growth.
