AI data centers, with power risk up front
- Applied Digital is shifting from crypto hosting and cloud services toward large AI data center campuses.
- Its biggest win is a 15-year, 400 MW CoreWeave lease at Polaris Forge 1.
- A second 15-year lease covers 200 MW at Polaris Forge 2 with an unnamed U.S. investment-grade hyperscaler.
- The main risk is no longer demand alone, but building and financing three major campuses at once.
- Finn's low valuation and financial health marks fit the risk: APLD is funding a huge buildout before most campuses earn rent.
A fast builder with a long punch list
Applied Digital is trying to become a landlord for the AI boom. Instead of selling software or chips, it builds power-hungry data centers and signs long leases with hyperscale customers. The bull case is simple: AI needs huge sites fast, and APLD has shown it can win large leases.
The company now has 400 MW contracted to CoreWeave at Polaris Forge 1 and 200 MW contracted to a U.S. investment-grade hyperscaler at Polaris Forge 2. Management also broke ground on Delta Forge 1, a 300 MW campus in the Southern U.S., and says it is marketing four development sites with about 1 GW of total possible power capacity.
The latest period improved the credit story. A March 2026 CoreWeave lease restructuring moved parts of Building 2 and Building 3 under a CoreWeave special purpose vehicle, added unconditional springing guarantees, and required a $50 million letter of credit. That should make financing easier if lenders agree the lease cash flows are safer.
The bear case is just as clear. APLD is still a construction and financing story, not a mature data center REIT. It must deliver several very large projects, close the ChronoScale transaction for its Cloud Services unit, turn the pipeline into signed leases, and rely on Base Electron to help solve future power supply.
Rent, buildouts, and power access
APLD makes money in three reported segments. Data Center Hosting rents energized space to crypto mining customers. Cloud Services rents GPU-based compute capacity, but the company is working to merge that unit with EKSO Bionics to form ChronoScale. HPC Hosting is the growth engine, where APLD develops AI-ready data centers and leases capacity to large customers.
The model can produce long, contracted revenue streams if the campuses are finished on time and tenants start paying rent. It can also create extra revenue from tenant fit-out services, where APLD manages the inside buildout of data halls for customers.
The weak spot is capital intensity. These campuses need land, power, cooling gear, buildings, transformers, debt, equity, and permits before the full rent shows up. That is why the page should not read like a clean victory lap, even after big lease wins.
Power is the long-term constraint. APLD is backing Base Electron, an independent power producer, with a limited guarantee in exchange for an equity stake of about 10%. Base Electron plans about 1.2 GW of natural gas-fired generation in the Dakotas, but APLD still depends on that separate company to finance and build the assets.
What APLD sells
Data Center Hosting
APLD runs 286 MW of fully contracted crypto hosting capacity across Jamestown and Ellendale, North Dakota. This is the older business and still provides current revenue.
HPC Campus Leasing
This is the main bet. Polaris Forge 1 is contracted for 400 MW with CoreWeave, and Polaris Forge 2 has a signed 15-year lease for 200 MW with a U.S. investment-grade hyperscaler.
Tenant Fit-Out Services
APLD can manage the internal data hall buildout for tenants. This deepens customer ties and helped drive a large part of fiscal Q2 2026 revenue.
Cloud Services
This unit provides bare metal access to GPU clusters for AI workloads. APLD plans to combine it with EKSO Bionics to form ChronoScale, while keeping more than 80% ownership after the deal.
Base Electron power stake
APLD is supporting Base Electron to add about 1.2 GW of natural gas-fired power to the Dakota grid. This is not a core operating segment, but it could help protect future campus growth.
Latest revenue mix
Segment shares use revenue for the quarter ended February 28, 2026. HPC Hosting is already the largest reported segment, but customer concentration is high because the big AI leases are tied to a small number of tenants.
What could break the plan
Construction overload
High impact · Medium oddsAPLD is building across Polaris Forge 1, Polaris Forge 2, and Delta Forge 1. Delays, cost overruns, equipment shortages, or missed service dates could hurt returns and tenant trust.
Financing strain
High impact · Medium oddsThe company has raised large amounts of debt and preferred equity to fund construction. That supports growth, but it also makes the stock sensitive to rates, credit markets, dilution, and lender views of tenant quality.
Two-customer dependence
High impact · Medium oddsThe AI data center strategy rests mainly on CoreWeave and one unnamed hyperscaler for now. The CoreWeave SPV structure and $50 million letter of credit improve credit support, but they do not remove concentration risk.
Power plan slips
High impact · Medium oddsAI campuses need large, reliable power. APLD's Base Electron plan could help, but Base Electron is a separate company that must finance, permit, and build about 1.2 GW of generation.
ChronoScale does not close
Medium impact · Medium oddsCloud Services was moved back into continuing operations for accounting reasons, even though the ChronoScale transaction is still advancing. If the deal fails, the pure-play data center story becomes messier.
In one breath
Is Applied Digital a crypto mining company?
Not exactly. It still hosts crypto mining customers in its Data Center Hosting segment, but the growth plan is now focused on AI and HPC data center campuses.
Who are Applied Digital's biggest customers?
CoreWeave is the named anchor customer at Polaris Forge 1. A second U.S. investment-grade hyperscaler signed a 15-year lease for 200 MW at Polaris Forge 2, but APLD has not named that customer.
What is ChronoScale?
ChronoScale is the planned public company that would combine APLD's Cloud Services unit with EKSO Bionics. APLD expects to keep more than 80% ownership after the transaction.
Why does power matter so much for APLD?
AI data centers need huge amounts of electricity. APLD is backing Base Electron to add about 1.2 GW of natural gas-fired power in the Dakotas, but that project still has financing and build risk.