Applied Digital Corporation (APLD): Why Shares Soared 48% on a Landmark AI Data Center Deal

Applied Digital Corporation (APLD) delivered one of the market’s most eye-catching performances on June 2, 2025, with shares soaring 48.46% to close at $10.14. The catalyst? A transformative $7 billion, 15-year AI data center lease agreement with CoreWeave, a leading AI hyperscaler. This move not only signals a new era for Applied Digital, but also underscores the explosive demand for next-generation artificial intelligence and high-performance computing infrastructure. For investors seeking exposure to the backbone of the AI revolution, this development places APLD firmly in the spotlight.

The Deal That Changed Everything: $7 Billion, 15-Year Lease with CoreWeave

On June 2, 2025, Applied Digital announced it had signed two long-term lease agreements with CoreWeave to deliver a combined 250 megawatts (MW) of critical IT load at its Ellendale, North Dakota data center campus. These agreements span approximately 15 years and are expected to generate an estimated $7 billion in revenue over the life of the contracts. The leases cover the full capacity of two under-construction high-performance computing (HPC) facilities: a 100MW data center (Building 2) and a 150MW data center (Building 3).

According to the company’s announcement, CoreWeave will have the option to expand its footprint by an additional 150MW at the same campus, potentially increasing the total contracted capacity to 400MW. The first 100MW facility is slated to be ready for service in the fourth quarter of 2025, with the second 150MW facility following in mid-2026. If CoreWeave exercises its option, a third 150MW data center could be operational by 2027.

Why This Matters: The AI Infrastructure Gold Rush

This deal is more than just a revenue windfall for Applied Digital. It positions the company as a key enabler of the AI and high-performance computing boom. As the demand for AI accelerates, the need for specialized, energy-efficient data centers capable of supporting massive computational loads has never been greater. Applied Digital’s ability to secure a marquee customer like CoreWeave for a multi-billion-dollar, multi-year contract validates its strategy and infrastructure capabilities.

Wes Cummins, chairman and CEO of Applied Digital, emphasized the significance of the agreement, stating, “We believe these leases solidify Applied Digital’s position as an emerging provider of infrastructure critical to the next generation of artificial intelligence and high-performance computing.” This confidence is echoed by industry analysts, with one major firm reiterating its Buy rating and $10 price target on APLD following the announcement.

Financial Impact: Revenue Visibility and Growth Potential

The financial implications of this agreement are substantial. With $7 billion in expected revenue over 15 years, Applied Digital gains unprecedented visibility into its future cash flows. This level of contracted revenue provides a strong foundation for further investment, expansion, and potential margin improvement. The structure of the leases includes customary service levels, with penalties for service defaults, ensuring both parties are incentivized to maintain high operational standards.

Importantly, the company’s North Dakota campus is designed for scalability. While the current agreements cover 250MW, the site can support up to 400MW, with the potential to expand to one gigawatt of total power capacity. This flexibility positions Applied Digital to capture additional demand as the AI and HPC sectors continue their rapid growth.

Market Reaction: APLD Stock Rockets Higher

The market’s response was swift and decisive. Shares of APLD surged as investors digested the magnitude of the CoreWeave deal. The nearly 50% jump in share price reflects both the immediate financial impact and the long-term strategic value of the agreement. In a session where the broader market was mixed, with the Nasdaq edging up just 0.21%, Applied Digital stood out as a clear leader among technology and infrastructure stocks.

Investor enthusiasm was further buoyed by analyst support. Needham, a respected research firm, reiterated its Buy rating and maintained a $10 price target on APLD, signaling confidence in the company’s growth trajectory following the deal.

Industry Context: The Race for AI Compute Power

The AI revolution is driving an unprecedented need for specialized data centers. Traditional facilities often lack the power density, cooling, and connectivity required for AI workloads. Companies like CoreWeave are at the forefront of deploying large-scale AI and high-performance computing infrastructure, and they are seeking partners capable of delivering reliable, scalable solutions.

Applied Digital’s ability to secure a long-term, high-value lease with a leading AI hyperscaler demonstrates its competitive edge in this rapidly evolving landscape. The company’s focus on energy-efficient, high-capacity campuses in strategic locations positions it to benefit from the secular tailwinds propelling the AI and HPC industries.

What’s Next for Applied Digital?

With the CoreWeave agreement in place, Applied Digital is poised for a new phase of growth. The company’s immediate priorities will include completing construction on the North Dakota facilities, meeting service delivery milestones, and potentially expanding the campus to accommodate additional demand. The structure of the leases includes performance incentives and penalties, ensuring a strong focus on operational excellence.

Looking ahead, Applied Digital’s ability to attract additional hyperscale customers or expand existing relationships could further accelerate its growth. The company’s scalable infrastructure and proven execution make it a compelling partner for organizations seeking to deploy AI and HPC workloads at scale.

Risks and Considerations

While the CoreWeave deal is a game-changer, investors should be mindful of the execution risks inherent in large-scale infrastructure projects. The leases include provisions for penalties and potential termination if delivery milestones are not met. Applied Digital will need to maintain a laser focus on project management and operational reliability to fully realize the benefits of the agreement.

Additionally, the company’s ability to manage capital expenditures, maintain service levels, and adapt to evolving customer needs will be critical to sustaining its momentum. However, the long-term nature of the contracts and the growing demand for AI infrastructure provide a strong backdrop for continued success.

The Big Picture: Applied Digital at the Heart of the AI Boom

The surge in APLD shares following the CoreWeave announcement is a testament to the market’s recognition of the company’s strategic positioning. As AI and high-performance computing reshape industries, the demand for specialized data center infrastructure is set to accelerate. Applied Digital’s landmark $7 billion, 15-year lease agreement not only delivers immediate financial benefits but also establishes the company as a key player in the digital infrastructure ecosystem.

For investors seeking exposure to the foundational technologies powering the AI revolution, Applied Digital offers a compelling opportunity. The company’s combination of contracted revenue, scalable infrastructure, and industry partnerships positions it for sustained growth in one of the market’s most dynamic sectors.

Conclusion: APLD’s Breakout Moment

Applied Digital Corporation’s explosive move on June 2, 2025, was driven by a single, transformative event: the signing of a $7 billion, 15-year AI data center lease with CoreWeave. This agreement provides long-term revenue visibility, validates the company’s strategic direction, and positions it at the forefront of the AI infrastructure boom. As the world races to build the digital backbone for artificial intelligence, Applied Digital has emerged as a critical enabler—and investors have taken notice.

With its shares now firmly in the spotlight, Applied Digital is a name to watch as the AI and high-performance computing revolution accelerates. The company’s ability to execute on its ambitious plans will be key, but the foundation for future growth has never looked stronger.