Another Bitcoin miner turned AI infrastructure player is making waves. Applied Digital (Nasdaq: APLD) announced last week that CoreWeave exercised additional lease options, bringing the total HPC hosting deal to 400 MW of critical IT load with an estimated $11 billion in cumulative revenue over a 15-year term. This places Applied Digital in the same league as Core Scientific and TeraWulf, which have secured multi-billion-dollar HPC contracts.
Transformation from Self-Mining to Hosting
Headquartered in Dallas, Texas, Applied Digital has completely exited proprietary Bitcoin mining and now operates as a pure hosting provider for both blockchain and high-performance computing (HPC) clients. Its North Dakota footprint includes a 106 MW crypto mining facility in Jamestown (fully utilized) and an 180 MW crypto mining site in Ellendale. The latter also hosts the Polaris Forge 1 campus, which is being developed for HPC hosting. Under the CoreWeave agreement, three buildings will be delivered in phases: the first 100 MW facility in Q4 2025, a second 150 MW building by mid-2026, and a third 150 MW building targeted for 2027.
For the fiscal year ended May 31, 2025, Applied Digital reported $51.84 million in total revenue, primarily from blockchain hosting services. The HPC hosting segment has yet to generate revenue, but with construction milestones approaching and fixed long-term leases in place, HPC is expected to become the dominant revenue driver.
Inside the $11 Billion Deal
The agreement with CoreWeave consists of three long-term leases totaling 400 MW of critical IT capacity. The initial announcement on June 2, 2025, covered two buildings (100 MW + 150 MW) worth approximately $7 billion. On August 29, CoreWeave exercised an option for an additional 150 MW building, pushing the total commitment to $11 billion. All leases are structured as fixed payment agreements, providing predictable cash flows. Notably, the Polaris Forge 1 campus has access to over 1 GW of potential power capacity, signaling room for future expansion beyond the current deal.
Financing the Buildout
Large-scale data center construction requires significant upfront capital. As of May 31, 2025, Applied Digital held $44.9 million in unrestricted cash. To fund the Ellendale expansion, the company raised $874.7 million during the fiscal year, a 496% increase from the prior year. Key funding rounds included a $160 million private placement backed by NVIDIA, a $450 million convertible note, $375 million financing from Sumitomo Mitsui Banking Corporation, and a multi-tranche $900 million investment commitment from Macquarie Asset Management. Warrants were also granted to CoreWeave and Macquarie, adding complexity to the capital structure. Investors should monitor dilution risks, interest costs, and potential warrant overhangs.
Valuation and Investment Thesis
At $14.38 per share, Applied Digital’s market cap is approximately $3.76 billion. While the trailing price-to-sales ratio of 72.5x appears inflated, forward projections offer context. At full buildout, the 400 MW HPC capacity could generate ~$733 million annually, plus $63 million from crypto mining hosting. Assuming a conservative 50% EBITDA margin, EBITDA could reach ~$400 million, implying a forward EV/EBITDA multiple of ~11.1x. The company does not mine or hold Bitcoin, so it does not capture direct BTC upside. Instead, its value lies in recurring revenue, execution on capacity, and long-term lease economics. For investors seeking exposure to the HPC infrastructure buildout with lower volatility and clearer cash flows, APLD offers a tangible play. Those looking for Bitcoin leverage may find better opportunities elsewhere.