Applied Digital lands $5B AI lease in North Dakota, stock surges 7%

Applied Digital today signed a $5 billion deal with a U.S.-based investment-grade Hyperscaler to lease out the North Dakota Polaris Forge 2 Campus AI infrastructure for 15 years. The lease term also covers 200 MW (megawatts) of purpose-built critical IT load and HPC infrastructure.

Applied Digital clarified in an October 22 press release that the lease represents $5 billion in total contracted revenue over an estimated 15-year lease term.  The company also disclosed that the Hyperscale holds a first right of refusal for an additional 800 MW of critical IT load, highlighting Polaris Forge 2 Campus’s full expansion potential of 1 GW (gigawatt).

Applied Digital has now leased 600 MW across its Polaris Forge 1 and Polaris Forge 2 Campuses in North Dakota to two Hyperscalers. The company claimed that the latest lease deal reinforces its position as a fast-scaling U.S.-based AI infrastructure builder. Polaris Forge 2 spans over 900 acres and is designed to deliver a projected PUE of 1.18, with near-zero water usage. 

Cummins says fast delivery sets his company apart

Wes Cummins, the Chairman and CEO of Applied Digital, boasted that fast delivery, not just the size of its pipeline, sets the company apart from its competitors. He cautioned that the real constraint in the industry is execution. 

Cummins claimed that Applied Digital’s team proves that large-scale, next-generation data centers can be designed, financed, and activated faster and more efficiently. He believes Polaris Forge 2 builds on this momentum, reflecting the company’s strong partnerships and its rapid reshaping of the AI infrastructure landscape. 

The executive explained that the initial 200 MW is phased within two buildings at the Polaris Forge 2 site. It is expected to go online in 2026 and reach a total of 200 MW in 2027. Cummins also emphasized that the campus leverages the company’s Different by Design philosophy. Applied Digital’s proprietary design is built for liquid cooling, power density, and sustainable performance. 

APLD stock surges after lease announcement

Applied Digital (NASDAQ: APLD) stock surged more than 7% on Wednesday following news of the lease deal. The stock reversed last week’s gains when it plunged nearly 8% on Tuesday, while its price dropped 18% in just days to hover around $33, down from over $40.

The stock price volatility has reportedly sparked a selloff due to skepticism that the company’s valuation and expansion narrative may be unrealistic. CEO Cummins sold 400,000 shares for $6 million, and Applied Digital’s CFO, Muhammad LaVanway, sold 75,000 shares worth $1.1 million.

The timing triggered speculation that the company’s management believes the stock has peaked, sparking a renewed wave of selling pressure. Adding to investor unease, rumors of insider trading circulated to reignite fears of a peaking stock market.

The company’s competitive moat is reportedly thinning despite $11 billion in committed revenue and new billion-dollar leasing contracts. Investors are starting to question whether APLD has any more room left for growth. Applied Digital’s valuation also appears somewhat stretched, despite strong top-line growth. 

Fears of an AI industry pullback have also amplified investor jitters. The sharp fall of APLD stock serves as a reality check for investors chasing the AI boom. The combination of competitive threats, insider selling, and stretched valuation paints a cautionary picture despite the company boasting ambitious expansions, strong revenue growth, and high-profile partnerships.

APLD’s narrative could reportedly shift from breakout success to a cautionary tale of overextension in the AI rush. The company’s management must restore confidence and deliver sustainable profitability to regain investor trust. 

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