• Earlier in June 2026, Applied Digital Corporation announced a new 15-year, take-or-pay lease at its Delta Forge 2 AI Factory campus with a U.S.-based investment-grade hyperscaler, covering 210 MW of critical IT load and adding an estimated US$5.20 billion in base-term contracted revenue.
• This latest agreement lifts Applied Digital’s portfolio to five AI Factory campuses with about US$36.00 billion in base-term lease revenue secured and around 70% of that backed by U.S.-based investment-grade hyperscalers, underlining how a concentrated set of long-term clients underwrites its infrastructure build-out.
• We’ll now examine how this large hyperscaler-backed lease, and the associated financing capacity, could reshape Applied Digital’s existing investment narrative.

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Applied Digital Investment Narrative Recap

To own Applied Digital, you need to believe its hyperscaler anchored AI factory model can turn long dated leases into sustainable cash flows while it manages heavy build out costs and client concentration. The new Delta Forge 2 lease strengthens the near term catalyst of converting contracted backlog into funded campuses, but it also amplifies the key risk around execution and balance sheet strain as another 210 MW project is added to the pipeline.

Among the recent announcements, the new US$350 million revolving credit facility, with an extra US$200 million accordion, feels most relevant. It directly links the growing base of hyperscaler backed leases to the funding Applied Digital can tap for pre and post lease development, which matters for how quickly those US$36.00 billion of base term contracts translate into operating assets and, eventually, cash generation.

Yet against this impressive contracted revenue, investors should still weigh how customer concentration and rising leverage could affect Applied Digital’s ability to...

Applied Digital's narrative projects $2.6 billion revenue and $467.2 million earnings by 2029.

Uncover how Applied Digital's forecasts yield a $52.80 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were already modeling revenue growth above 80 percent a year and a swing to about US$640.5 million in earnings, while also flagging heavy reliance on a few hyperscaler contracts; this new lease could push those views even further apart, so you should compare these bullish assumptions with more cautious takes before deciding where you sit on the spectrum.

Explore 16 other fair value estimates on Applied Digital - why the stock might be worth less than half the current price!

Decide For Yourself

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Applied Digital research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.
• Our free Applied Digital research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Applied Digital's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.