• Applied Digital (NasdaqGS:APLD) signed a major electric service agreement with Montana-Dakota Utilities to power its upcoming Polaris Forge 3 AI Factory in North Dakota.
• The agreement secures electricity capacity for a high-density AI data center that is central to the company’s planned infrastructure expansion.
• This development supports Applied Digital’s buildout pipeline and is expected to contribute to regional economic activity around the new facility.

Applied Digital enters this power agreement with its share price at $45.2 and very large gains over the past year, up 358.0%, and over the past three years, up 391.8%. The stock is also up 348.4% over five years and 60.8% year to date, while returns over the past week and month show modest declines of 2.7% and 1.5% respectively.

For investors tracking NasdaqGS:APLD, this utility deal is a key step in turning Applied Digital’s AI data center plans into operational assets that can support revenue generation. The agreement also reinforces the company’s role in supplying power-intensive infrastructure that AI customers need, with potential ripple effects for jobs and investment in North Dakota.

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This electric service agreement is a foundational piece of Applied Digital’s plan to scale Polaris Forge 3 into a 430 megawatt AI data center. For an AI-focused operator that relies on long duration, power-heavy leases, securing grid access early is critical because it supports contract discussions with hyperscale clients and anchors future financing. The deal also fits with Applied Digital’s preference for the Dakotas, where access to lower cost and often cleaner power is part of its pitch to AI and high performance computing customers who are sensitive to energy costs and sustainability metrics. For investors comparing Applied Digital with larger data center players such as Equinix, Digital Realty or CyrusOne, this highlights that the company is committing to very large-scale, capital-intensive infrastructure and will likely continue to depend on debt markets and long-term contracts to make these projects economical.

How This Fits Into The Applied Digital Narrative

• The agreement supports the narrative that control over long duration power in the Dakotas is a core advantage for Applied Digital, helping it convert projected AI lease demand into contracted, power-secured campuses.
• It also sharpens some of the narrative’s existing concerns around capital intensity, because a 430 megawatt site adds to the build-out obligations that need to be funded alongside existing projects and debt.
• The specific regulatory approval process with the North Dakota Public Service Commission and the long timeline to the planned August 2027 start of operations are not fully reflected in the narrative, yet these factors could affect project timing.

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The Risks and Rewards Investors Should Consider

• ⚠️ Applied Digital already carries significant debt and has used senior secured notes and bridge financing, so another large power-backed project increases balance sheet pressure if leasing or funding conditions change.
• ⚠️ The long development cycle to the expected 2027 start date, plus required regulatory approvals, creates execution and timing risk if costs rise or approvals take longer than planned.
• 🎁 Securing a power agreement of this scale strengthens Applied Digital’s position when negotiating long-term AI leases, which can support visibility once contracts are signed and facilities are operational.
• 🎁 Concentrating campuses in power-rich regions such as North Dakota can help the company offer lower energy costs and energy-efficient infrastructure to AI tenants compared with some competing operators.

What To Watch Going Forward

From here, watch how quickly Applied Digital converts this power capacity into signed, long-term leases with investment-grade AI customers, and whether the company discloses contract volumes tied specifically to Polaris Forge 3. Progress on regulatory approvals and construction milestones will also matter, because delays could affect when the site starts contributing to revenue. Given the capital-intensive nature of the build-out, investors should follow any new financing tied to Polaris Forge 3 and how it interacts with existing debt and cash runway. Comparing Applied Digital’s execution pace and tenant mix with larger peers in data center infrastructure can help you judge whether the company is turning its power agreements into durable, contracted cash flows.

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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.