Applied Digital has secured a significant 15-year lease with a U.S.-based hyperscaler for its Delta Forge 2 campus, generating approximately $5.2 billion in revenue during the base term. According to the company's announcement, the agreement could reach $12.7 billion total revenue if all renewal options are exercised over 30 years. The deal adds 210 megawatts of contracted AI computing capacity to Applied Digital's portfolio, with operations expected to begin in the first quarter of 2028. As reported by the company, this represents the fifth AI Factory campus in its franchise model, with the campus located in a new southern state. The Dallas-based company designs, builds, and operates data centers for artificial intelligence, cloud, networking, and blockchain workloads.
The Delta Forge 2 lease represents Applied Digital's third long-term agreement with the same investment-grade hyperscaler customer. As reported by the company, its contracted portfolio now spans five campuses with 1.4 gigawatts of critical IT load. The company also reported approximately 2.15 gigawatts of grid-connected utility power across its portfolio. Applied Digital's contracted base-term lease revenue has increased to about $36 billion, with potential to reach roughly $86 billion if all renewal options are exercised. According to Chairman and CEO Wes Cummins, the company's deliberate franchise model across every campus and market demonstrates strong validation of their approach.
Applied Digital shares jumped 8% in after-hours trading on June 8, 2026, following the announcement, with the stock currently trading at $44.65. The company noted that 70% of its contracted revenue now comes from U.S.-based investment-grade hyperscalers, with the latest contract expanding its customer-backed data center pipeline. The agreement uses a take-or-pay structure, which supports contracted revenue over the lease period, and the customer is based in the United States. The deal strengthens Applied Digital's contracted revenue base as hyperscaler-backed agreements now make up most of its contracted revenue. However, recent financial analysis shows the company's P/S ratio of 40.04, suggesting potential overvaluation relative to sales, while insiders have sold $1.2 million worth of shares in the past three months with no reported insider buying.
The Delta Forge 2 agreement reflects rising demand for AI infrastructure among large technology companies. According to Applied Digital, the campus will support high-power density computing needs and use waterless cooling technology and high-power density infrastructure, purpose-built for large-scale AI training and inference workloads. The facility is designed to handle workloads requiring large energy and cooling capacity, with the company's infrastructure supporting advanced computing requirements. Hyperscalers have increased long-term leasing activity as AI models require more resources, though the company did not disclose technical details about the customer's planned workloads. The Delta Forge 2 data center is expected to play a crucial role in meeting the increasing demand for high-performance computing and AI applications, which have seen exponential growth in recent years.
