Applied Digital (APLD) Expands CoreWeave Deal—How Will Multi-Billion Leases Shape Long-Term Growth?

• Applied Digital reported first-quarter earnings for the period ended August 31, 2025, with sales reaching US$64.22 million and a net loss of US$18.5 million, while also announcing an expansion of its long-term lease agreement with CoreWeave to cover 400 megawatts at an approximate contract value of US$11 billion.
• The company also broke ground on a new campus and secured US$112.5 million in initial funding from Macquarie, reinforcing its push to scale AI infrastructure and secure future revenue streams through multi-year contracts with major hyperscale clients.
• We'll examine how the expanded multi-billion dollar CoreWeave lease shapes Applied Digital's growth outlook and risk profile.

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Applied Digital Investment Narrative Recap

To be a shareholder in Applied Digital, you need to believe that the rising demand for AI infrastructure and long-term hyperscaler contracts will translate into sustainable growth and predictable revenue, despite recent swings in crypto and margin pressures. The recent expansion of the CoreWeave lease deepens client concentration but also addresses the short-term catalyst of revenue visibility, while the biggest near-term risk remains execution on these contracts and maintaining financing flexibility amid losses and heavy capex. The impact of this news is material, as it both supports Applied Digital’s growth case and intensifies dependency risks.

Among recent announcements, the finalized US$11 billion, 400-megawatt long-term lease with CoreWeave stands out as the most relevant to this catalyst. This single agreement not only fills existing capacity but underpins future revenue, highlighting Applied Digital's transition toward multi-year, high-value AI partnerships that appeal to those focused on revenue stability. Still, such concentrated exposure heightens the stakes if customer dynamics shift or utilization does not meet expectations.

However, in contrast to these growth headlines, investors should be aware that...

Read the full narrative on Applied Digital (it's free!)

Applied Digital's narrative projects $755.7 million revenue and $102.2 million earnings by 2028. This requires 73.7% yearly revenue growth and a $263.2 million increase in earnings from the current -$161.0 million.

Uncover how Applied Digital's forecasts yield a $27.00 fair value, a 21% downside to its current price.

Exploring Other Perspectives

Fair value estimates from 29 members of the Simply Wall St Community span a wide range from US$2.11 to US$27 per share. While many are focused on Applied Digital's new long-term contracts, customer concentration risk remains a core factor shaping the company's outlook.

Explore 29 other fair value estimates on Applied Digital - why the stock might be worth as much as $27.00!

Build Your Own Applied Digital Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Applied Digital research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
• Our free Applied Digital research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Applied Digital's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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