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Applied Digital (APLD) has been on a remarkable run this year, with its stock climbing over 280% year-to-date. The company specializes in next-generation data centers and infrastructure designed to handle the heavy computational loads demanded by artificial intelligence (AI), machine learning (ML), and blockchain applications. Its advanced data center designs meet the rigorous power and cooling requirements of modern GPUs, positioning Applied Digital to benefit as demand for AI-driven technologies continues to rise. As Applied Digital operates at the center of the capital-heavy infrastructure boom, its long-term contracts with hyperscaler tenants position it well to deliver significant growth in the coming years. Applied Digital Wins $5 Billion Contract Adding to these positives, Applied Digital recently announced a significant lease agreement with a U.S.-based hyperscaler at its Polaris Forge 2 Campus, currently under construction near Harwood, North Dakota. The deal represents approximately $5 billion in total contracted revenue over a 15-year lease term and covers 200 megawatts (MW) of IT capacity purpose-built for AI and HPC operations. Following the news, APLD shares surged in morning trading, reflecting investor enthusiasm. With Polaris Forge 2, Applied Digital’s leased capacity with two of the world’s largest hyperscalers now totals 600 MW across its Polaris Forge 1 and 2 campuses in North Dakota. This expansion strengthens the company’s reputation as one of the fastest-growing builders of AI infrastructure in the U.S., positioning it well to capture the booming demand for high-performance computing (HPC) solutions. APLD’s $11 Billion Opportunity Applied Digital is strengthening its position in the fast-growing AI infrastructure space through an expanded partnership with CoreWeave (CRWV), a publicly traded AI hyperscaler. During the first quarter of fiscal 2026, the company broadened its long-term lease agreements with CoreWeave at its Ellendale, North Dakota facility, known as Polaris Forge 1. Initially, Applied Digital had 250 megawatts of capacity under Contract at the campus, representing around $7 billion in revenue over 15 years. CoreWeave has since exercised its option to extend that agreement, taking up the full 400 megawatts of capacity currently being built at Polaris Forge 1. This expansion lifts the total value of Applied Digital’s contracted revenue with CoreWeave to approximately $11 billion. Beyond leasing, CoreWeave has also enlisted Applied Digital to handle the tenant fit-out for the first 100 megawatts of the project. This collaboration deepens operational ties between the two companies. It reflects Applied Digital’s growing role as a strategic partner, offering technical expertise and infrastructure integration that extend well beyond basic data center operations. Growth Outlook and Long-Term Potential Looking ahead, Applied Digital plans to continue investing in new technologies and expanding its operational capabilities. Management expects to replicate its integrated business model across future tenant relationships, leveraging technical expertise and long-term partnerships to support growth. Polaris Forge 1, in particular, offers substantial upside potential, with the possibility of scaling beyond one gigawatt once new transmission infrastructure becomes available between 2028 and 2030. Anchored by long-term contracts with hyperscale tenants, Applied Digital is poised for meaningful growth in net operating income, offering investors exposure to a rapidly expanding market with significant structural tailwinds. Will Applied Digital Stock Hit $56 in a Year? With hyperscalers expected to invest multiple billions of dollars in AI development over the next year, Applied Digital is well-positioned to capture the surging demand for next-generation computing infrastructure. Further, the company’s blockchain hosting operations are also performing strongly. Applied Digital currently runs 286 megawatts of fully contracted capacity across its two North Dakota facilities. With Bitcoin (BTCUSD) prices holding firm, this segment continues to provide a solid base for growth. Management has expressed optimism about the business and its long-term prospects. Wall Street analysts are bullish about Applied Digital’s prospects. The Street's highest price target is $56 for APLD, implying about 72% upside potential in one year from its closing price of $32.54 on Oct. 21. This target doesn’t seem out of reach. Applied Digital’s expanding scale, combined with the potential for a significant contract or partnership, could propel the stock past the $56 mark.
