Applied Digital’s $11 Billion HPC Deal
Applied Digital has made headlines with its substantial $11 billion high-performance computing (HPC) deal, placing the company in a competitive position alongside industry giants like Core Scientific and TeraWulf. Despite this significant development, the company has not garnered the same level of attention on social media platforms, raising questions about market awareness.
Market Performance and Competitors
Notably, Bitcoin mining stocks with ties to both artificial intelligence (AI) and HPC have been some of the year’s top performers. Companies such as Iris Energy, Cipher Mining, and Hut 8 have captured considerable attention recently, while TeraWulf has also been in the spotlight for its impressive multibillion-dollar hosting deal with Fluidstack, supported by Google.
Despite being ranked seventh by market capitalization on Bitcoinminingstock.io, Applied Digital (Nasdaq: APLD) has largely flown under the radar. Recently, the firm announced that CoreWeave exercised additional lease options that could yield $11 billion in revenue through a 400 MW critical IT load lease. This deal represents one of the largest revenue-generating agreements in the public Bitcoin mining sector, comparable to HPC contracts held by Core Scientific and TeraWulf.
Company Transition and Financial Overview
When I first highlighted Applied Digital in September 2023, the company was actively negotiating a major 400 MW hyperscale deal, with 90% of discussions concluded. Those who invested early have witnessed astonishing stock growth of over 300%. This should not be seen as a mere retrospective applause but as an opportunity for a fresh analysis of the company’s present and potential.
Based in Dallas, Texas, Applied Digital has transitioned its business from self-mining operations to a hosting-centric model, focusing entirely on serving clients in the blockchain and HPC sectors. The firm’s primary operational hub is located in North Dakota, where its data center operations are expanding. For the fiscal year ending May 31, 2025, Applied Digital reported total revenue of approximately $51.84 million, which came from blockchain hosting services while reflecting a $12.08 million loss from its previous Cloud Services operations.
Although revenue from HPC hosting is still on the horizon, construction milestones are approaching, and long-term lease agreements are in place, indicating that the company is gearing up for a major shift in revenue streams.
Partnerships and Financial Commitments
CoreWeave is a critical partner in this transformation, having signed three long-term lease agreements that fall under Applied Digital’s umbrella. These leases, which total 400 MW of critical capacity, span around 15 years and involve fixed payment structures, ensuring a steady revenue flow that is not susceptible to market fluctuations. The first announcements regarding these leases were made on June 2, 2025, detailing two leases that together account for 250 MW, with further details on service timelines.
However, the significant financial commitments obliged Applied Digital to seek substantial capital. As of May 31, 2025, the company held $44.9 million in unrestricted funds, which was not adequate for outright funding of its expansions. It therefore resorted to a multifaceted fundraising strategy, attracting over $874.7 million during the year – a remarkable 496% increase from the previous year. Key funding events included a $160 million private placement backed by NVIDIA and investments totaling $450 million through convertible notes and significant financing arrangements with major banks.
Investor Considerations
With a market valuation of around $3.76 billion at $14.38 per share, investors are closely watching Applied Digital’s complicated financial landscape, highlighted by potential dilution risks and multiple financing layers. The validity of the company’s model, which does not engage directly in Bitcoin mining or holding cryptocurrencies, may appeal more to those seeking a lower volatility investment with clear cash flow prospects related to recurring revenue from data center hosting.
Although Applied Digital is a serious contender in the sector, investors looking to capitalize on Bitcoin’s price movement might find more fitting opportunities elsewhere.
Conclusion
Overall, with its robust contracts and evolving operations, Applied Digital is positioned as a noteworthy player within the HPC hosting landscape, with initial revenues expected soon and discussions with other potential clients suggesting further growth on the horizon.
