Applied Digital (APLD): $36B of signed AI leases, 175 MW live, and a stock down 49%

The standard $APLD story is that Applied Digital is a former bitcoin hoster riding the AI trade, and that the AI trade just broke. The first half is out of date. The second half is not what the contracts say.

Applied Digital has signed about $36 billion of 15-year, take-or-pay data center leases covering roughly 1,410 MW of critical IT load, most of it with an investment-grade hyperscaler. Only 175 MW of that is running today, about 12%. The stock closed near $25.77 on 2026-09-28, 49% under its $50.73 52-week high. The market is not pricing the leases. It is pricing the distance between signed and built, and the debt that bridges it. This piece walks through what Applied Digital owns, how the revenue line actually splits, and what would change the read.

Why it matters now

The AI data center and hosting group sold off together through August and September 2026. On 2026-09-15 APLD fell 4% to $23.72 and turned negative for the year with no company news, after a 24% slide over the month, while the broader data center ETF moved 0.6% (24/7 Wall St.). The next quarterly report, fiscal Q1 2027, is expected around 8 October 2026 per Benzinga; the company had not confirmed the date at the time of writing.

What does Applied Digital do?

Applied Digital designs, builds and operates large data center campuses for AI workloads, which it calls AI Factories. It does not rent out GPUs. The tenant brings the chips; Applied Digital provides the building, the power, the liquid cooling and the operations, and gets paid rent for the capacity whether or not the tenant's servers are busy.

It runs three things today:

1. HPC Hosting, the growth business: five campuses, Polaris Forge 1, 2 and 3 in North Dakota and Delta Forge 1 and 2 in Louisiana and a second southern state, all under 15-year leases.
2. Data Center Hosting, the legacy business: 286 MW of energized space for bitcoin miners in Jamestown (106 MW) and Ellendale (180 MW), North Dakota, both running at full capacity. The miners pay for capacity, not per coin, so this line does not depend on the bitcoin price.
3. ChronoScale ($CHRN), the former cloud services arm, separated in May 2026 by combining it with Ekso Bionics. Applied Digital still owns about 96% and consolidates it, but excludes it from its adjusted figures.

The North Dakota location is the point, not an accident. Cold air cuts cooling costs, and the company says it has design approvals from every major hyperscaler. It is also backing about 1.2 GW of gas-fired generation in the Dakotas through Base Electron Corp., developed with Babcock & Wilcox ($BW), to secure future power.

How Applied Digital makes money

The contract book, as of the fiscal Q4 2026 release (Applied Digital, 2026-07-27):

That sums to about 1,410 MW and $36B over the base terms, or about $86B if every renewal option is exercised. The Polaris Forge 2 tenant also holds a right of first refusal on another 800 MW at that campus (Applied Digital, 2025-10-22).

This is the single most useful thing to understand about the income statement. Fit-out revenue arrives while a building is being finished and fades when it is done. Base rent is the recurring line the whole thesis rests on, and it only grows as megawatts go live. Reading APLD's revenue growth as rent growth overstates the business today; reading the lease table as revenue in hand overstates it in the other direction.

Where it sits in the AI infrastructure trade

Applied Digital sits in QA's Cooling / DC Infra bubble, the physical plant of AI, and in the Compute Capacity and Neoclouds themes. On price, it trades with the other converted bitcoin-hosting names, not with the data center REITs. Its highest one-year correlations on QA's data are $CORZ Core Scientific (0.74), $WULF TeraWulf (0.72), $IREN IREN (0.71), $BRUN Boost Run (0.70), $RIOT Riot (0.70) and $CIFR Cipher (0.69).

That correlation explains September better than any company event did. The group is financed on the expectation that hyperscaler capex stays aggressive, so it sells off together when rates rise or when one operator writes something down, whatever each company's own contracts say. For the same conversion story told from the bitcoin side, see TeraWulf (WULF): why a bitcoin miner became an AI landlord. For the tenant on Polaris Forge 1, see the CoreWeave explainer.

The numbers

Fiscal year ended 2026-05-31, from the company release unless noted:

• Revenue: $611.3M, up 167%. Adjusted revenue (excluding ChronoScale) $539.7M.
• Net loss to common stockholders: $249.2M, or $0.91 per share. Adjusted EBITDA $107.2M; net operating income $90.4M.
• Stock-based compensation: up $198.3M on the year, most of the jump in SG&A to $332.1M, tied largely to grants around the ChronoScale separation.
• Balance sheet at 2026-05-31: $4.2B of cash and restricted cash, $5.0B of debt. In June the company added $1.59B of 7.000% secured notes due 2031 for the fourth Polaris Forge 1 building.
• Share count: 284.3M shares outstanding. Dividing the net loss by the loss per share gives about 201M average shares in fiscal 2025 and about 274M in fiscal 2026, roughly 36% more (QA's arithmetic from the reported figures).
• Market value: about $7.5B at $25.77, against $611M of trailing revenue (QA data, 2026-09-28).
• Street: 15 analysts, mean rating Strong Buy, mean target about $66 (QA data, 2026-09-28). A consensus, not a forecast QA endorses.

The bull case

• Signed, long and mostly investment-grade. About 70% of the $36B base-term value sits with two investment-grade hyperscalers; one of them signed three campuses in a row. CoreWeave's leases gained parent guarantees and a $50M letter of credit after CoreWeave's own A3-rated refinancing.
• Delivered on schedule so far. The first 100 MW at Polaris Forge 1 went live in October 2025 and Building 2 Phase 1 (75 MW) on 2026-06-30, both on the dates the company gave.
• Financing at the asset level. The campuses are funded by secured notes issued by project subsidiaries ($2.15B at 6.750% for Polaris Forge 2, $1.59B at 7.000% for Polaris Forge 1), which keeps most construction debt tied to specific leased buildings.
• Pipeline. The company says it is marketing another 1.7 GW across several states, on top of the 1.4 GW under construction.
• A cash-generating legacy business. Data Center Hosting earned $12.5M of segment operating profit in Q4 on $113.8M of assets.

The bear case

• Construction risk on 88% of the book. 1,235 of 1,410 contracted MW are not live. A slipped building delays rent while the interest clock keeps running.
• Concentration. One hyperscaler accounts for about $20B of the $36B, and CoreWeave, itself a leveraged AI builder, for about $11B. Three tenants carry the entire HPC thesis.
• Debt and dilution. $5.0B of debt before the June notes, a net loss of $249.2M, and a share count that grew about a third in a year. When the stock falls, the equity part of the buildout gets more expensive.
• Earnings quality. Fit-out revenue inflates the top line, and fiscal 2026 GAAP results include a $75.8M gain on the Babcock & Wilcox warrant, which says nothing about the data center business.
• Sector beta. A 0.70-plus correlation with the hosting cohort means APLD reprices with the group on rates and sentiment, independent of its own milestones.

How to access Applied Digital

$APLD lists on the Nasdaq, so any broker with US-market access can hold it directly. Fund exposure is thin: on QA's data it is 2.62% of the Roundhill S&P SMID 60 ETF, $LMBO, and 24/7 Wall St. puts it at 4.49% of the Global X Data Center & Digital Infrastructure ETF, $DTCR. The ETF holdings table on /stocks/apld lists every fund QA tracks that carries it. To hold US-listed names from outside the US, see /stack/ibkr for the broker QA uses for direct exchange access.

What to watch

• Fiscal Q1 2027 results, expected around 8 October 2026. The number that matters is base rent, not total revenue: the first full quarter with 175 MW live at Polaris Forge 1.
• Polaris Forge 2's first building. The first megawatts for hyperscaler A are due in 2026; on-time delivery there tests the franchise model at a second campus.
• Financing terms. The coupon and structure of the next secured notes for Delta Forge 1 and Polaris Forge 3 show what lenders now charge this group.
• CoreWeave's credit. The Building 4 lease is set to move to a CoreWeave subsidiary once that entity is rated investment-grade; progress or slippage there changes the credit behind the tenant that carries about 31% of the book.
• Correlation with the hosting cohort. If APLD starts to decouple from Core Scientific, IREN and Cipher as rent comes online, the market is pricing it as a landlord rather than a sentiment trade.

Bubble shifts and rule-based alerts on $APLD and the AI hosting group are part of /pro.

Live data on this ticker: /stocks/apld - price, ETF holdings, bubble correlation, bot positions.

Bubble context: /bubbles/cooling-dc-infra - the cluster this name belongs to and how it's moving.

QuantAbundance is educational research. Nothing here is investment advice. See /disclosures.