Applied Digital (Nasdaq: APLD) has quietly secured one of the largest known revenue contracts among publicly listed bitcoin mining companies: a 15-year, 400 MW high-performance computing (HPC) hosting agreement with hyperscaler CoreWeave, projected to generate $11 billion in total revenue. Despite this milestone, the stock has drawn less attention on social media compared to peers like IREN, Cipher, and Hut 8.
Company Transformation: From Self-Mining to Digital Infrastructure Hosting
Headquartered in Dallas, Texas, Applied Digital has undergone a fundamental business model shift. According to its Fiscal Year 2025 report, the company no longer operates any proprietary bitcoin mining and has transitioned into a fully hosting-focused business, serving both blockchain and HPC clients. Its current data center footprint includes:
- Jamestown, ND: 106 MW of crypto mining hosting capacity, fully operational.
- Ellendale, ND: 180 MW of crypto mining hosting already online, plus a separate HPC campus – Polaris Forge 1 – which will deliver 400 MW to CoreWeave across three phases: 100 MW by Q4 2025, 150 MW by mid-2026, and another 150 MW targeted for 2027.
For the fiscal year ending May 31, 2025, Applied Digital reported $51.84 million in total revenue, composed of $63.92 million from blockchain hosting services offset by a $12.08 million loss from discontinued cloud services operations. HPC hosting has not yet generated revenue, but with construction milestones approaching, it is expected to become the dominant revenue driver in the coming years.
Inside the $11B Deal: Three Buildings, Multiple Phases
CoreWeave – the same hyperscaler that signed landmark contracts with Core Scientific in 2024 – has become Applied Digital's anchor HPC client. The two companies have executed three long-term lease agreements totaling 400 MW of critical IT capacity. These leases span approximately 15 years and are structured as fixed payment agreements, providing predictable revenue streams insulated from market volatility.
The initial announcement on June 2, 2025 covered two leases for 250 MW, representing roughly $7 billion in total revenue. On August 29, 2025, CoreWeave exercised an option for an additional 150 MW building, bringing the total commitment to $11 billion. All three buildings are located at Polaris Forge 1, a campus with access to over 1 GW of potential power capacity, signaling room for further expansion with other hyperscaler clients.
Financing the Buildout: Capital Raised, Complexity Added
Executing such a large-scale buildout requires significant upfront capital. As of May 31, 2025, Applied Digital had just $44.9 million in unrestricted cash. To fund the Ellendale expansion, the company raised over $874.7 million during the fiscal year, a 496% increase from the prior year. Major funding sources include:
- A $160 million private placement backed by NVIDIA and related entities.
- A $450 million convertible note.
- $375 million financing from Sumitomo Mitsui Banking Corporation (SMBC).
- A multi-tranche $900 million investment commitment from Macquarie Asset Management.
These instruments also introduced complexity: warrant grants to CoreWeave and Macquarie, dilution risk, multiple classes of preferred equity, and convertible debt. Investors should monitor interest costs, dilution triggers, and warrant overhangs closely.
Valuation and Investment Thesis: Should You Buy APLD?
At $14.38 per share, Applied Digital's market capitalization stands at approximately $3.76 billion. Based on trailing revenue, the P/S multiple is elevated at ~72.5x. However, forward projections offer context: at full buildout, the CoreWeave contract could generate roughly $733 million annually from HPC hosting, plus ~$63 million from crypto mining. Assuming a conservative 50% EBITDA margin, the company could produce ~$400 million in EBITDA, yielding an EV/EBITDA multiple of 11.1x and an EV/revenue multiple of 5.7x. While not cheap, these multiples reflect the visibility of multi-year fixed cash flows.
It's important to note that Applied Digital does not mine bitcoin or hold its own BTC, so it won't capture upside from bitcoin price appreciation like vertically integrated miners. Instead, its value lies in recurring hosting revenue, capacity execution, and long-term lease economics. For investors seeking exposure to the HPC infrastructure buildout with lower volatility and clearer cash flows, Applied Digital offers a tangible play. But for those seeking Bitcoin leverage, other names may be more suitable.