As Bitcoin miners increasingly pivot to artificial intelligence and high-performance computing (HPC), Applied Digital (Nasdaq: APLD) has emerged with a landmark agreement that places it firmly in the spotlight. The company announced that CoreWeave has exercised additional lease options, bringing the total contracted capacity to 400 megawatts (MW) of critical IT load under a 15-year term, projected to generate $11 billion in total revenue. This deal rivals the scale of HPC contracts held by Core Scientific and TeraWulf, making Applied Digital a key player in the AI infrastructure race.
Applied Digital’s stock has surged over 300% since initial coverage in September 2024 flagged its potential. However, this milestone is not a victory lap but an invitation to reassess the company’s intrinsic value.
Transformation from Self-Mining to Digital Infrastructure Hosting
Headquartered in Dallas, Texas, Applied Digital has undergone a fundamental shift. According to its Fiscal Year 2025 report, the company no longer operates any proprietary mining and has transitioned into a fully hosting-focused business, serving blockchain and HPC clients. Its current footprint is concentrated in North Dakota:
- Jamestown, ND: 106 MW of crypto mining hosting capacity, fully operational.
- Ellendale, ND: 180 MW of crypto mining hosting already online, plus the HPC campus Polaris Forge 1 under development, which will deliver 400 MW of HPC capacity to CoreWeave across three phases: first 100 MW by Q4 2025, second 150 MW by mid-2026, and third 150 MW by 2027.
For the fiscal year ending May 31, 2025, Applied Digital reported $51.84 million in total revenue, consisting of $63.92 million from blockchain hosting services offset by a $12.08 million loss from discontinued cloud services. HPC hosting revenue has yet to commence, but with long-term leases secured and construction milestones approaching, HPC hosting is poised to become the dominant revenue driver.
Inside the $11B Deal: Three Buildings, Multiple Phases
CoreWeave, the hyperscaler that made headlines with landmark contracts in 2024, is now central to Applied Digital’s transformation. The two companies have signed three long-term lease agreements totaling 400 MW, structured as fixed payment contracts, providing predictable revenue streams insulated from market volatility.
The initial announcement on June 2, 2025 included two buildings: a 100 MW facility (ELN02) set for service readiness in Q4 2025, and a 150 MW building (ELN03) expected online by mid-2026. These leases account for approximately $7 billion in total revenue. On August 29, 2025, CoreWeave exercised its option for an additional 150 MW building (ELN04), targeted for 2027, bringing the total commitment to $11 billion.
All three leases are located at the Polaris Forge 1 campus, which has access to over 1 GW of potential power capacity, signaling potential for expansion beyond the initial 400 MW under contract.
Financing the Buildout: $874.7M Raised with Complexity
Executing such large-scale infrastructure requires significant upfront capital. As of May 31, 2025, Applied Digital held $44.9 million in unrestricted cash, insufficient for the Ellendale expansion. The company pursued a mix of funding mechanisms, raising over $874.7 million during the fiscal year, a 496% increase year-over-year.
Major funding rounds included a $160 million private placement backed by NVIDIA, a $450 million convertible note, $375 million financing with Sumitomo Mitsui Banking Corporation (SMBC), and a multi-tranche $900 million investment commitment from Macquarie Asset Management. Additionally, warrants were granted to CoreWeave and Macquarie. While these tools provide a runway for construction, they introduce dilution risk, multiple classes of preferred equity, convertible debt, and long-term lease commitments. Investors should closely monitor interest costs, dilution triggers, and warrant overhangs.
Valuation: Is $APLD a Buy Now?
At a share price of $14.38, Applied Digital’s market cap stands at approximately $3.76 billion. Based on FY25 revenue of $51.9 million, the trailing price-to-sales ratio is an inflated ~72.5x. However, forward projections provide context: at full buildout, the 400 MW CoreWeave contract could generate ~$733 million annually, plus $63 million from crypto hosting, totaling ~$796 million. Assuming a conservative 50% EBITDA margin, the company could produce ~$400 million EBITDA. With a current enterprise value of $4.42 billion, this translates to a forward EV/EBITDA multiple of ~11.1x and an EV/revenue multiple of ~5.7x. These are not cheap, but are grounded for a business with fixed multi-year cash flow visibility.
That said, Applied Digital does not mine or hold Bitcoin, so it won’t capture the price leverage seen in vertically integrated miners. Its value lies in recurring revenue, capacity execution, and long-term lease economics. For investors seeking exposure to HPC buildout with lower volatility and clear cash flows, Applied Digital offers a tangible play. For those looking for BTC leverage, alternative options may be more suitable.