Applied Digital Corp (APLD)’s Blue-Chip Customer Returns for More

Applied Digital Corp (NASDAQ:APLD) is one of the best data center stocks to invest in according to billionaires. Applied Digital shares have gained around 57% year-to-date and have surged more than 245% over the past 12 months. Analysts continue to see substantial upside potential in the stock.

Applied Digital Corp (APLD)’s Blue-Chip Customer Returns for More

Applied Digital Corp (NASDAQ:APLD) has secured another major data center deal with an existing hyperscale customer. On May 20, the company said it signed a 15-year lease for its fourth AI-focused data center campus, known as Polaris Forge 3, with this customer. This is the same customer that the company previously signed for the Delta Forge 1 campus.

Applied Digital said the latest contract is expected to generate around $7.5 billion in revenue over the initial lease term. If all renewal options are exercised, the total value could reach $18.2 billion. According to Applied Digital, the latest deal pushes its contracted revenue backlog to roughly $31 billion across four campuses. The backlog could increase to $73 billion if customers extend their leases.

About 65% of Applied Digital’s contracted revenue is now backed by blue-chip customers. These are US-based investment-grade hyperscalers. The Polaris Forge 3 project will provide 300 megawatts of computing capacity and is scheduled to begin operations in 2027. So far, Applied Digital’s total contracted capacity is 1.2 gigawatts.

Applied Digital Corp (NASDAQ:APLD) builds and operates data centers and provides colocation services. The company provides the digital infrastructure and services to power AI, cloud, and blockchain workloads. It has purpose-built infrastructure for training and running AI models.

While we acknowledge the risk and potential of APLD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APLD and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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