We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
APLD Doubles Down on AI/ML Hosting With Landmark CoreWeave Lease
Read MoreHide Full Article
Key Takeaways
APLD signed a 250 MW, 15-year lease with CoreWeave, expected to generate $7 billion in revenues.
APLD's Ellendale site enables GPU-optimized AI workloads with liquid cooling and low-cost energy.
APLD is shedding Cloud Services to focus on AI hosting and target 1 GW capacity with REIT plans.
Applied Digital (APLD - Free Report) recently cemented its status as a rising force in AI/ML infrastructure with a landmark 250 MW, 15-year lease agreement with CoreWeave at its Ellendale, ND, campus. The deal, expected to generate approximately $7 billion in revenues, includes phased delivery of 100 MW by the fourth quarter of 2025 and 150 MW by mid-2026, with an option for an additional 150 MW. More than a traditional hyperscale project, this agreement validates APLD’s focus on GPU-centric and AI-optimized infrastructure. The Ellendale campus is built for power-dense deployments using liquid cooling and benefits from low-cost, abundant energy, making it ideal for compute-heavy workloads such as LLM training and inference.
This partnership reflects APLD’s strategic pivot from a hybrid operator to a pure-play AI/HPC infrastructure platform. The ongoing divestiture of its Cloud Services business underscores a sharper focus on delivering turnkey AI hosting environments, complete with tailored server, cooling, and power configurations. As it scales toward 1 GW capacity and eyes a REIT conversion, APLD is reshaping its identity beyond real estate, becoming a purpose-built enabler of next-gen AI infrastructure.
Competition Update
As APLD’s anchor tenant, CoreWeave (CRWV - Free Report) exemplifies the AI-native hyperscaler model. The $7 billion deal not only secures compute capacity but highlights CoreWeave’s growing dominance in GPU-powered infrastructure. Recently, CoreWeave has reportedly raised over $1 billion to expand its data-center network and enhance GPU offerings. Its aggressive approach—working closely with NVIDIA and securing anchor sites like Ellendale—strengthens the company as a direct competitor in the AI infrastructure arms race.
Though better known for colocation, Equinix (EQIX - Free Report) is increasingly deploying GPU-enabled setups tailored for AI use cases. In October 2024, Equinix announced a joint venture with GIC and CPP Investments to raise over $15 billion for expanding its xScale data centers in the United States, adding more than 1.5 gigawatts of capacity to meet growing AI and cloud demands. Equinix's strategic move underscores its commitment to supporting hyperscale clients. With this initiative, Equinix solidifies its position as a key player in the evolving digital infrastructure landscape.
APLD’s Price Performance, Valuation and Estimates
Shares of APLD have surged 70.4% in the year-to-date period against the industry’s decline of 3.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, Applied Digital trades at a forward price-to-sales ratio of 12.42, above the industry average as well as higher than its five-year median of 1.42. APLD carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Applied Digitals’ fiscal 2026 earnings implies a 73.6% rise year over year.
Image: Bigstock
APLD Doubles Down on AI/ML Hosting With Landmark CoreWeave Lease
Key Takeaways
Applied Digital (APLD - Free Report) recently cemented its status as a rising force in AI/ML infrastructure with a landmark 250 MW, 15-year lease agreement with CoreWeave at its Ellendale, ND, campus. The deal, expected to generate approximately $7 billion in revenues, includes phased delivery of 100 MW by the fourth quarter of 2025 and 150 MW by mid-2026, with an option for an additional 150 MW. More than a traditional hyperscale project, this agreement validates APLD’s focus on GPU-centric and AI-optimized infrastructure. The Ellendale campus is built for power-dense deployments using liquid cooling and benefits from low-cost, abundant energy, making it ideal for compute-heavy workloads such as LLM training and inference.
This partnership reflects APLD’s strategic pivot from a hybrid operator to a pure-play AI/HPC infrastructure platform. The ongoing divestiture of its Cloud Services business underscores a sharper focus on delivering turnkey AI hosting environments, complete with tailored server, cooling, and power configurations. As it scales toward 1 GW capacity and eyes a REIT conversion, APLD is reshaping its identity beyond real estate, becoming a purpose-built enabler of next-gen AI infrastructure.
Competition Update
As APLD’s anchor tenant, CoreWeave (CRWV - Free Report) exemplifies the AI-native hyperscaler model. The $7 billion deal not only secures compute capacity but highlights CoreWeave’s growing dominance in GPU-powered infrastructure. Recently, CoreWeave has reportedly raised over $1 billion to expand its data-center network and enhance GPU offerings. Its aggressive approach—working closely with NVIDIA and securing anchor sites like Ellendale—strengthens the company as a direct competitor in the AI infrastructure arms race.
Though better known for colocation, Equinix (EQIX - Free Report) is increasingly deploying GPU-enabled setups tailored for AI use cases. In October 2024, Equinix announced a joint venture with GIC and CPP Investments to raise over $15 billion for expanding its xScale data centers in the United States, adding more than 1.5 gigawatts of capacity to meet growing AI and cloud demands. Equinix's strategic move underscores its commitment to supporting hyperscale clients. With this initiative, Equinix solidifies its position as a key player in the evolving digital infrastructure landscape.
APLD’s Price Performance, Valuation and Estimates
Shares of APLD have surged 70.4% in the year-to-date period against the industry’s decline of 3.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, Applied Digital trades at a forward price-to-sales ratio of 12.42, above the industry average as well as higher than its five-year median of 1.42. APLD carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Applied Digitals’ fiscal 2026 earnings implies a 73.6% rise year over year.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.