Overview
- Applied Digital announced Tuesday that it signed a 15‑year take‑or‑pay lease with a U.S. investment‑grade hyperscaler for 210 megawatts of IT load at its Delta Forge 2 campus, obliging the buyer to pay at least $5.2 billion over the base term.
- If the customer exercises all renewal options, the agreement could be worth about $12.7 billion over a 30‑year total term, and Applied Digital said the deal raises its total contracted base‑term lease revenue to $36 billion.
- CEO Wes Cummins said this is the company’s third long‑term agreement with the same hyperscaler, and Applied Digital expects initial operations at Delta Forge 2 to begin in the first quarter of 2028.
- The stock jumped roughly 10 to 11 percent in premarket trading after the announcement and chip and memory suppliers such as Marvell and Micron also rose as investors cheered clearer long‑term demand signals.
- The deal highlights why hyperscalers use take‑or‑pay contracts to secure compute capacity and reduce operator risk, but industry observers warn that high‑bandwidth memory shortages, near‑term memory cyclicality, and upcoming earnings reports still pose supply and market risks.