Shares of Applied Digital surged as much as 17% over two sessions after the company announced its second major hyperscaler lease in under a month, pushing its stock to $43.40 in pre-market trading. The deal raises a critical question: whether the company can finance and build out billions of dollars in contracted capacity fast enough while still hemorrhaging cash.
A Repeat Customer Doubles Down, Pushing Contracted Revenue Past $30 Billion. On May 20, Applied Digital signed a 15-year lease at its fourth AI data center campus with the same investment-grade hyperscaler that signed at its Delta Forge 1 site. The campus will deliver 300 MW of computing power.
The deal is valued at roughly $7.5 billion in base revenue — or $18.2 billion if all renewal options are exercised. Combined with an April lease that lifted total contracted revenue past $23 billion , the backlog now likely exceeds $30 billion. For investors, a returning customer signals the company's build-and-lease model is working — not just on paper.
Revenue Is Tripling, But Losses Are Growing Faster. Fiscal Q3 2026 revenue hit $126.6 million, up 139% year over year, but came alongside a $100.9 million net loss.
The accumulated deficit reached $583 million by February 2026. The company is spending heavily on construction and financing — including a $2.15 billion secured notes offering at 6.75% — meaning today's contracted revenue won't show up as profit for years. Investors are betting on the future, not the present income statement.
Building 1.2 Gigawatts Requires an Enormous Amount of Capital and Power. In just 11 months, Applied Digital has signed leases covering 1.2 GW of capacity , and a $2.4 billion power generation project with Babcock & Wilcox will supply 1.2 GW via natural gas . With $2.1 billion in cash against $2.7 billion in debt , the balance sheet is stretched. An active shelf registration gives the company flexibility to issue more stock or debt — meaning dilution risk is real.
The Stock's Wild Swings Tell the Real Story. Shares dropped roughly 25% from a recent peak near $48 on valuation and execution fears before this week's rebound. Needham raised its price target to $51 , but the gap between massive contracted revenue and persistent losses leaves the stock vulnerable to any construction delays or financing hiccups. Applied Digital is selling Wall Street a compelling vision — the open question is whether the engineering and the capital markets cooperate long enough to deliver it.