Applied Digital signs 250MW agreement with CoreWeave for capacity at Ellendale campus, North Dakota

Applied Digital has secured two 15-year lease agreements with CoreWeave for 250MW of IT load at its Ellendale, North Dakota data center, projected to generate approximately $7 billion in revenue. The deal underscores the increasing demand for AI infrastructure, with Applied Digital strategically pivoting from cryptocurrency hosting to high-performance computing (HPC) and AI to capitalize on market opportunities. CoreWeave also retains an option for an additional 150MW at the Ellendale campus, potentially expanding the partnership further.

Analysis

Applied Digital Corporation (APLD) has secured a landmark 15-year agreement with CoreWeave (CRWV) for 250MW of IT load at its Ellendale, North Dakota data center, a deal projected to yield approximately $7 billion in revenue, signaling a major validation of its strategic pivot from cryptocurrency hosting to high-performance computing (HPC) and AI infrastructure. This contract, which includes an option for CoreWeave to access an additional 150MW, significantly de-risks Applied Digital's revenue outlook and underpins its growth trajectory, aligning with the exponential demand in the AI sector. The phased delivery, with the first 100MW facility expected in Q4 2025 and the subsequent 150MW by mid-2026, provides clear operational milestones, while Applied Digital's broader plans for over 1GW of power capacity currently under various stages of load study, including facilities in Jamestown, a planned 200MW facility in Iowa, and a proposed 430MW site in Toronto, South Dakota, highlight its ambition to become a key player in AI infrastructure. This move reflects a wider industry trend, as evidenced by CoreWeave's own shift from crypto-mining to AI cloud services and similar retrofitting efforts by firms like Core Scientific (CORZ). The strongly positive sentiment score of 0.85 for APLD underscores market confidence in this strategic direction and the substantial long-term value of the CoreWeave partnership, even as CoreWeave's recent IPO raised $1.5 billion, reportedly $4 billion less than previously mooted.

Key Decisions for Investors

• Investors should consider the $7 billion, 15-year CoreWeave contract as a significant positive catalyst for Applied Digital (APLD), enhancing long-term revenue visibility and validating its strategic shift towards the high-growth AI infrastructure market.
• Monitor Applied Digital's execution on the Ellendale campus development, particularly the Q4 2025 and mid-2026 delivery timelines, as well as its progress in securing power and financing for its ambitious expansion pipeline exceeding 1GW.
• Evaluate the ongoing financial stability and demand growth from CoreWeave, as a key client, alongside the competitive landscape and capital intensity required for APLD to scale its operations effectively in the burgeoning AI data center sector.