Snapshot
- Ticker: APLD (Nasdaq)
- Bucket: Data-Center Operators (HPC Pivots)
- Q4 2025 fund position: $278.0 M (11.34 M sh) — 5.04 % of 13F, #8 holding
- Fiscal year: ends May 31
- HQ: Dallas, TX
Business Overview
Applied Digital develops, owns, and operates next-generation data-center infrastructure purpose-built for HPC and AI workloads. The portfolio focus is on North Dakota stranded-wind-power sites that combine cheap energy with cold ambient (favorable for thermals) and very low population density (rapid permitting). Two campuses dominate:
- Polaris Forge 1 (Ellendale, ND) — the flagship CoreWeave-anchored campus, designed for up to 1 GW of critical IT load.
- Polaris Forge 2 (Harwood, ND) — second campus, designed around an unnamed investment-grade hyperscaler anchor with a right-of-first-refusal on +800 MW.
The legacy Bitcoin-mining-hosting business and the company’s brief (2023–early 2025) AI Cloud GPU services line were both deconsolidated/restructured in 2024–2025 as the company pivoted decisively toward pure-play data-center development.
Financial Trajectory (FY25 ended 5/31/25)
| Metric (USD M) | FY25 |
|---|---|
| Revenue | ~144.2 (+5.5 % YoY) |
| Data Center Hosting segment revenue | ~142.3 |
| Data Center Hosting segment operating profit | 63.9 |
| Net loss | −231.1 |
| Operating margin | −11.7 % |
The headline FY25 P&L is dominated by:
- Restructuring charges related to the Cloud Services divestiture
- Pre-revenue investment in the Polaris Forge campuses
- Interest expense on project financing
The financial picture for APLD intentionally lags the contracted-revenue picture by several quarters — buildings have been signed and financed but RFS (ready-for-service) dates are 2025–2027. The thesis is built on contracted revenue ramps, not trailing financials.
CoreWeave Polaris Forge 1 — the Anchor
The June 2025 announcement of the CoreWeave lease and its August 2025 expansion are the central asset:
- June 2, 2025: Two parallel ~15-year leases totaling 250 MW, aggregate contracted revenue ~$7 B.
- August 29, 2025: Additional 150 MW added, bringing CoreWeave total to 400 MW at Ellendale and aggregate contracted revenue to ~$11 B.
- First 100 MW building: ready-for-service Q4 calendar 2025
- Second 150 MW building: ready-for-service mid-2026
- Full campus design: up to 1 GW with options for further expansion
The contracted-revenue magnitude (~$11 B) materially exceeds Applied Digital’s market cap as of Q4 2025 — the source of the 2024–2025 re-rating thesis.
Polaris Forge 2 — the Hyperscaler Lease
September 2025: Applied Digital announced a 200 MW lease with an unnamed US investment-grade hyperscaler:
- ~15 years
- ~$5 B contracted revenue
- Right-of-first-refusal on +800 MW expansion (could 5× the current commitment)
- Phased delivery through 2026
- Full 200 MW operational by 2027
- PUE 1.18 (best-in-class energy efficiency)
This second anchor diversifies APLD beyond CoreWeave and validates that the Ellendale playbook can be repeated for hyperscaler-class tenants. The aggregate contracted revenue across Polaris Forge 1 and 2 is ~$16 B over 15 years as of late 2025.
Capital Allocation
The Polaris Forge build-out is being financed through a mix of:
- Project finance debt secured against the contracted lease cashflows
- Macquarie infrastructure equity (announced 2025) — provides growth capital with a project-finance-friendly capital stack
- Holding-company equity issuance at the parent level
Why It Fits the Thesis
APLD is the cleanest “stranded power converted to AI hosting” expression in the portfolio: two transformative customers (CoreWeave + IG hyperscaler), two transformative sites (Polaris Forge 1 + 2), and clear yardsticks to mark the trade against. The fund holds it alongside CORZ as the two largest non-CoreWeave-stock names in the data-centers bucket.
Position History in the Fund
| Quarter | Position |
|---|---|
| Q1 2025 | New |
| Q2 2025 | Held |
| Q3 2025 | Increased |
| Q4 2025 | 11.34 M sh |
Risks
- Customer concentration — CoreWeave is most of the contracted HPC revenue; the second hyperscaler de-risks but doesn’t eliminate it.
- Construction execution and financing for Ellendale phases II/III and Harwood; cost overruns or delays compress IRR.
- Power-grid and curtailment risk in Western North Dakota.
- CoreWeave counterparty risk flows through to APLD via the lease.
- Pre-revenue investment phase — the GAAP P&L will look poor until 2026–2027 when buildings reach full RFS.