Should US$7.5 Billion Hyperscale Lease at Polaris Forge 3 Require Action From Applied Digital (APLD) Investors?

• Earlier in May 2026, Applied Digital announced a long-term lease for its fourth AI Factory campus, Polaris Forge 3, securing 300 MW of critical IT load backed by approximately 430 MW of utility power under 15-year take-or-pay agreements with a high investment-grade U.S. hyperscaler.
• This single hyperscaler deal adds about US$7.50 billion in base-term contracted revenue and lifts Applied Digital’s total contracted lease backlog to roughly US$31.00 billion across four AI Factory campuses, materially expanding its AI and high-performance computing footprint.
• Next, we’ll examine how this very large, long-duration hyperscaler lease at Polaris Forge 3 may reshape Applied Digital’s investment narrative.

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Applied Digital Investment Narrative Recap

To own Applied Digital, you have to believe its AI Factory model can convert very large, long-dated leases into durable cash flows while managing high capital needs and customer concentration. The Polaris Forge 3 hyperscaler deal meaningfully strengthens contracted revenue and near term visibility, but it also reinforces the biggest current risk around reliance on a handful of large tenants and the balance sheet strain of building out 1,200 MW of AI capacity.

The most relevant recent announcement is the April 2026 lease at Delta Forge 1, also for 300 MW of critical IT load and about US$7.50 billion in base-term revenue with the same high grade hyperscaler. Together with Polaris Forge 3, these paired contracts deepen Applied Digital’s exposure to a single customer relationship at the same time they underpin its key catalyst of expanding AI and high performance computing lease backlog.

Yet behind this expanding backlog, investors should be aware that heavy debt needs and reliance on a few mega leases could...

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

Applied Digital's narrative projects $2.6 billion revenue and $467.2 million earnings by 2029. This requires 100.2% yearly revenue growth and a $587 million earnings increase from -$119.8 million today.

Uncover how Applied Digital's forecasts yield a $52.80 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Some of the lowest ranked analysts were already cautious, assuming revenue would grow about 52.6% annually but without profitability by 2029, and they highlight how heavy debt and large, single tenant leases might still worry you even after a US$7.50 billion Polaris Forge 3 win, which shows how far opinions can differ and why it can be useful to weigh several viewpoints before deciding what this new contract might mean for Applied Digital’s long term story.

Explore 21 other fair value estimates on Applied Digital - why the stock might be worth as much as 37% more than the current price!

Decide For Yourself

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Applied Digital research is our analysis highlighting 1 key reward and 4 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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