Applied Digital (APLD 3.61%) is rapidly evolving from a prominent data center operator for Bitcoin miners to a purpose-built artificial intelligence (AI) infrastructure provider.
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Currently, the key bottleneck in AI infrastructure buildout is not GPU supply, but data centers capable of supporting massive power density and advanced liquid-cooling requirements for complex, power-intensive AI workloads. Applied Digital has spent the past two years assembling the critical ingredients, such as land, power, construction crews, supply chain contracts, and engineering talent to build these "AI factories." With publicly traded hyperscalers estimated to invest nearly $350 billion in AI data centers in 2025 alone, the company is well positioned to be a major beneficiary of this massive opportunity.
High revenue visibility
Applied Digital now enjoys exceptional topline visibility. Prominent AI hyperscaler, CoreWeave (CRWV 2.56%), has exercised the option to expand the lease from 250 megawatts to the entire 400 megawatts of the company's data center capacity at the Polaris Forge 1 campus in North Dakota. This has expanded contract value from the previous $7 billion to $11 billion over the next 15 years. Management expects the CoreWeave lease to eventually contribute nearly $500 million in annual net operating income.
NASDAQ: APLD
Key Data Points
Applied Digital expects to expand the data center capacity at Polaris Forge 1 beyond one gigawatt from 2028 to 2030, as new transmission capacity (increased electrical power) comes online. The company is also initially constructing a 300-megawatt data center capacity at the Polaris Forge 2 campus in North Dakota, and expects to scale it to 1 gigawatt capacity with additional power availability. The company has already leased 200 megawatts of this under-construction capacity to an unnamed U.S.-based hyperscaler for $5 billion in contracted revenues over 15 years.
Considering all these factors, it is evident that while Applied Digital may not singlehandedly "set you for life," it stands out as a high-potential stock to ride the AI infrastructure wave for long-term investors. However, investors should also be aware of the risks, such as the capital-intensive business model, dependence on large hyperscaler contracts, and execution challenges in expanding capacity.
