Applied Digital locks $5.2 billion AI data center lease and plans $1.59 billion debt raise

Applied Digital signs $5.2 billion AI data center lease with U.S. hyperscaler

June 8 (Reuters) - Applied Digital (APLD.O), opens new tab has signed a 15-year lease with a U.S.-based hyperscaler at its Delta Forge 2 site which is expected to generate about $5.2 billion in revenue over the period, sending the company's shares up 8.7% in extended trading. Major technology companies are raising their spending on data centers to support powerful artificial intelligence models, boosting demand for electricity, computing capacity and specialized facilities. About 70% ⁠of Applied Digital's contracted revenue is now backed by U.S.-based investment-grade hyperscalers, the company said on Monday. The new agreement covers 210 megawatts of computing capacity at Delta Forge 2, Applied Digital's new AI Factory campus, under a take-or-pay lease structure. The company did not give more details on its new customer, but said the deal marked its third long-term lease with the same investment-grade hyperscaler. If ⁠all renewal options are exercised, the contract could generate about $12.7 billion in revenue over a 30-year period. Applied Digital's contracted portfolio now spans five campuses, representing 1.4 gigawatts of critical IT load and about ⁠2.15 gigawatts of grid-connected utility power. The company said its contracted base-term lease revenue has increased to about $36 billion and would rise to roughly $86 ⁠billion if all renewal options are exercised. Delta Forge 2 will use Applied Digital's waterless cooling technology and high-power density infrastructure ⁠designed for AI workloads. Initial operations at the campus are expected to begin in the first quarter of 2028. Reporting by Harshita Mary Varghese in Bengaluru; Editing by Arun Koyyur Our Standards: The Thomson Reuters Trust Principles., opens new tab

Applied Digital signs $5.2 billion AI data center lease with US hyperscaler

Major technology companies are ⁠raising ⁠their spending on data centers to support powerful artificial intelligence models, boosting demand for electricity, computing capacity and specialized facilities. Applied Digital has signed a 15-year lease with a US-based hyperscaler at its Delta Forge 2 site which is expected to generate about $5.2 billion in revenue over the period, sending the company's shares up 8.7% in extended trading. Major technology companies are ⁠raising ⁠their spending on data centers to support powerful artificial intelligence models, boosting demand for electricity, computing capacity and specialized facilities. About 70% of Applied Digital's contracted revenue is now backed by U.S.-based investment-grade hyperscalers, the company said on Monday. The new agreement covers 210 megawatts of computing ⁠capacity at Delta Forge 2, Applied Digital's new AI Factory campus, under a take-or-pay lease structure. The company ⁠did not give more details on its new customer, but said the deal marked its third long-term lease with the same investment-grade hyperscaler. If all renewal options are exercised, the contract could generate about $12.7 billion in revenue over a 30-year period. Applied Digital's contracted portfolio now spans five campuses, representing 1.4 gigawatts of critical IT load and about 2.15 gigawatts of grid-connected utility power. The company said its contracted base-term lease ⁠revenue has increased to about $36 billion and would rise to roughly $86 billion if all renewal options are exercised. Delta Forge 2 will use Applied Digital's waterless cooling technology and high-power density infrastructure designed for AI workloads. Initial operations at the campus are expected to begin in the first quarter of 2028.

Applied Digital subsidiary plans $1.59 billion notes offering By Investing.com

DALLAS - Applied Digital Corporation (NASDAQ:APLD) announced today that its subsidiary APLD ComputeCo 3 LLC intends to offer $1.59 billion in senior secured notes due 2031, subject to market conditions, according to a press release statement. The notes will be offered privately to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act of 1933. APLD ComputeCo 3 plans to use the net proceeds to fund construction of 150 megawatts of critical IT load at the fourth building at Polaris Forge 1, the company's data center campus in Ellendale, North Dakota. The proceeds will also repay the principal balance and accrued interest under a bridge loan facility with Goldman Sachs Bank USA as administrative agent, fund debt service reserves, and cover transaction expenses.The new debt issuance comes as Applied Digital carries total debt of $2.83 billion and reported negative levered free cash flow of $1.81 billion over the last twelve months. According to InvestingPro analysis, the company maintains a current ratio of 2.38, indicating liquid assets exceed short-term obligations despite aggressive expansion spending. The notes will be guaranteed by APLD ComputeCo 3's direct and indirect subsidiaries, including APLD ELN-04 HoldCo LLC, APLD ELN-04 LLC, and APLD ELN-04 LandCo LLC. The notes and guarantees will be secured by first-priority liens on substantially all assets of APLD ComputeCo 3 and the guarantors, along with all equity interests of APLD ComputeCo 3 held by its direct parent company, APLD HPC Holdings 2 LLC. Applied Digital will provide a completion guarantee for the ELN-04 project, committing to fund APLD ComputeCo 3 as necessary to ensure timely project completion. The company stated the offering is subject to market and other conditions, with no assurance regarding whether, when, or on what terms it may be completed.Applied Digital shares have surged 214% over the past year, though the stock recently declined 14% over the last week. With a market capitalization of $11.7 billion and revenue growth of 66%, InvestingPro data suggests the stock is currently trading above its Fair Value. Investors can access comprehensive analysis including 16 additional InvestingPro Tips and detailed Pro Research Reports covering APLD and 1,400+ other US equities. Applied Digital designs, builds, and operates data centers for artificial intelligence, networking, and blockchain workloads. The company is headquartered in Dallas and was founded in 2021. In other recent news, Applied Digital announced a significant 15-year lease agreement with a U.S.-based investment-grade hyperscaler for 210 megawatts of critical IT load at its Delta Forge 2 AI data center campus. This agreement is valued at approximately $5.2 billion in base-term contracted revenue, potentially reaching $12.7 billion if all renewal options are exercised over a 30-year term. The lease is part of Applied Digital's ongoing expansion, marking its third long-term agreement with the same customer and its fifth large-scale deal overall. Additionally, the company closed a $350 million revolving credit facility arranged by Goldman Sachs, with an option to increase it by $200 million. This credit facility will support the development of data center projects and other corporate needs. In response to these developments, Needham raised its price target for Applied Digital to $83, maintaining a Buy rating, while Citizens reiterated a Market Outperform rating with a $60 price target. These recent developments underscore Applied Digital's strategic growth in the AI data center sector. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Applied Digital Prices $1.59 Billion Notes Offering to Fund North Dakota AI Data Center

Applied Digital Corporation is a designer, builder, and operator of sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking, and blockchain workloads. The Company’s segments include data center hosting (Data Center Hosting Business) and high-performance compute hosting (HPC Hosting Business). The Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. Customer-owned hardware is installed in its facilities, and the Company provides operational and maintenance services for a fixed fee. Its facilities include a 106 megawatt (MW) facility in Jamestown and a 180 MW facility in Ellendale, North Dakota. The HPC Hosting Business designs, builds, and operates data centers which are designed to support high-compute applications using advanced technologies and infrastructures to provide services to customers. Its HPC data center is located at its Polaris Forge 1 campus with 100 MW capacity.

Applied Digital Plans $1.59 Billion Debt Offering to Fund AI Data Center Expansion

Applied Digital Corporation is a designer, builder, and operator of sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking, and blockchain workloads. The Company’s segments include data center hosting (Data Center Hosting Business) and high-performance compute hosting (HPC Hosting Business). The Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. Customer-owned hardware is installed in its facilities, and the Company provides operational and maintenance services for a fixed fee. Its facilities include a 106 megawatt (MW) facility in Jamestown and a 180 MW facility in Ellendale, North Dakota. The HPC Hosting Business designs, builds, and operates data centers which are designed to support high-compute applications using advanced technologies and infrastructures to provide services to customers. Its HPC data center is located at its Polaris Forge 1 campus with 100 MW capacity.

Applied Digital signs $5.2 billion AI data center lease with U.S. hyperscaler

Applied Digital Corporation is a designer, builder, and operator of sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking, and blockchain workloads. The Company’s segments include data center hosting (Data Center Hosting Business) and high-performance compute hosting (HPC Hosting Business). The Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. Customer-owned hardware is installed in its facilities, and the Company provides operational and maintenance services for a fixed fee. Its facilities include a 106 megawatt (MW) facility in Jamestown and a 180 MW facility in Ellendale, North Dakota. The HPC Hosting Business designs, builds, and operates data centers which are designed to support high-compute applications using advanced technologies and infrastructures to provide services to customers. Its HPC data center is located at its Polaris Forge 1 campus with 100 MW capacity.