Applied Digital Inks $7 Bln AI Data Center Lease With CoreWeave

Applied Digital (APLD) has signed 15-year lease agreements with CoreWeave for 250 MW of IT capacity at its Ellendale, North Dakota data center, projected to generate $7 billion in revenue. The deal, encompassing two facilities slated for completion in late 2025 and mid-2026, includes an option for CoreWeave to lease an additional 150 MW, potentially bringing the total hosted IT load to 400 MW. APLD stock is currently trading up nearly 50% following the announcement, reflecting investor confidence in the company's strategic positioning within the expanding AI infrastructure market.

Analysis

Applied Digital Corp. (APLD) has secured a significant long-term strategic partnership with AI hyperscaler CoreWeave, signing two lease agreements for its Ellendale, North Dakota data center campus that are projected to generate approximately $7 billion in total revenue over an approximate 15-year term. These agreements commit CoreWeave to 250 megawatts (MW) of IT capacity, with an option to expand this by an additional 150 MW, potentially bringing the total hosted IT load to 400 MW, underscoring the substantial demand for high-performance computing (HPC) and AI infrastructure. The Ellendale campus is being developed as a next-generation compute hub, engineered for high-density workloads and designed for eventual scalability up to 1 gigawatt of power capacity, leveraging its strategic location, energy-efficient climate, and access to low-cost power. The phased build-out includes a 100 MW data center expected to be operational in the fourth quarter of 2025, a second 150 MW facility by mid-2026, and a third 150 MW building in planning for potential deployment in 2027. This development is highlighted by the company as a foundational step in accelerating its growth and meeting surging AI infrastructure demand. The market has reacted with strong optimism, evidenced by APLD's stock price surging 48.64% to $10.21, supported by an extremely positive sentiment score of 0.85 for the news and 0.95 specifically for APLD, alongside a high market impact score of 0.75, aligning with key investment themes such as Artificial Intelligence and Infrastructure development.

Key Decisions for Investors

• Investors should assess the transformative impact of the CoreWeave agreements on Applied Digital's long-term revenue visibility and its enhanced positioning within the rapidly expanding AI data center infrastructure market.
• While the projected $7 billion revenue stream over 15 years is substantial, it is crucial to monitor Applied Digital's execution capabilities in delivering the multi-phase data center construction on the specified timelines (Q4 2025, mid-2026, 2027) and managing operational ramp-up.
• Given the significant immediate stock price appreciation of nearly 50%, investors should carefully evaluate entry points, acknowledging the heightened market expectations now embedded in APLD's valuation and the potential for increased volatility as development progresses.