We just covered Leopold Aschenbrenner’s Situational Awareness Reveals Its 10 Under-The-Radar AI Stock Picks. Applied Digital ranks #3 (see Situational Awareness Top 5 Under-The-Radar AI Stock Picks).
Situational Awareness Stake Value: $319,978,118
Applied Digital is an AI infrastructure company that builds and leases large-scale data centers to some of the biggest technology companies in the world. Its moat lies in two hard-to-replicate advantages: secured access to grid-connected power and the equipment needed to build these facilities, both of which are in acute global shortage with lead times stretching to years.
Applied Digital recently signed a lease for Polaris Forge 3, its fourth data center campus, with a major US hyperscaler. Polaris Forge 3 is a massive facility to house and power the servers that run AI workloads. The deal runs 15 years, is worth $7.5 billion in base contracted revenue, and the tenant must pay regardless of whether it uses the capacity.
Applied Digital has also announced a fifth campus, Delta Forge 2, located in a new southern state, adding another 210 MW of capacity under a 15-year lease worth $5.2 billion in base revenue. All five campuses combined now represent $36 billion in contracted base-term revenue, or up to $86 billion if all renewal options are exercised, with roughly 70% backed by investment-grade hyperscalers.
Applied Digital is well-positioned to benefit from the roughly $700 billion in hyperscaler CapEx anticipated in 2027, because that spending is being driven by the rollout of Nvidia’s next-generation GPU architectures, which demand far more power than legacy data centers can supply. Applied Digital’s facilities are purpose-built for exactly these requirements.
The stock trades at 7x forward 2029 EV/sales, a meaningful discount to peers Equinix and Digital Realty, which trade at 9.35x and 9.53x, respectively.
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