Shares of Applied Digital surged 12.1% to $44.40 after the company unveiled yet another mega-deal: a 15-year lease with an unnamed but investment-grade U.S. hyperscaler for 210 megawatts of computing power at its newest data center campus. The announcement extends a breathtaking run of contract signings — but the gap between promised revenue and current financial reality demands scrutiny.
• A $5.2 Billion Deal That Could Stretch to $12.7 Billion — If the Tenant Sticks Around. The agreement covers 210 MW under a "take-or-pay" structure — meaning the tenant pays whether or not it uses the full capacity — with approximately $5.2 billion in base-term revenue, rising to $12.7 billion if all renewal options are exercised over 30 years. That's a powerful guarantee on paper, but revenue won't begin flowing until initial operations commence in Q1 2028 . Investors are pricing in cash flows that are still nearly two years away.
• Five Campuses, $36 Billion in Contracted Revenue, and a $319 Million Business Today. The deal brings Applied Digital's total contracted portfolio to approximately $36 billion in base-term lease revenue across five campuses.
Analysts expect revenue growth of 187% for fiscal 2026, building on just $319 million in trailing twelve-month revenue. The company posted a $100.9 million net loss in its most recent quarter . The contracted backlog dwarfs the current business by roughly 100-to-1, underscoring massive execution risk in construction, financing, and power procurement.
• The Same Customer Keeps Signing — That's Both Validation and Concentration Risk. This is Applied Digital's third long-term lease with the same hyperscaler.
Roughly 70% of contracted revenue is now backed by U.S. investment-grade hyperscalers , which signals creditworthy demand. But heavy reliance on one or two tenants means any change in their AI spending plans could ripple across the entire portfolio.
• Wall Street Is Rewarding the Vision, Not the Income Statement. Compass Point raised its price target to $70 , and Needham lifted its to $66 . At an $11.3 billion market cap, the stock trades at a steep premium to current earnings — which remain deeply negative. The bet is that Applied Digital's repeatable "franchise model" of campus construction can convert contracts into actual cash before dilution or debt erodes shareholder value. Bitcoin's concurrent 2.4% rise added a tailwind to sentiment, but the real question is whether this five-year-old company can finance and build 1.4 gigawatts of capacity without stumbling.