Applied Digital Has $36 Billion in Contracted AI Revenue — Is This the Most Overlooked Stock of 2026?

Most of the attention in the AI boom has gone to the companies building chips and writing the software, names like Nvidia, Microsoft and OpenAI that dominate headlines and dinner-table conversations alike. Quietly, behind that more famous layer of the AI economy, a different kind of company has been signing some of the largest, longest-duration contracts in the entire sector, and almost nobody outside specialist investing circles seems to have noticed. Applied Digital, a Dallas-based data center builder trading under the ticker APLD, now has approximately $36 billion in contracted base-term lease revenue locked in across five AI data center campuses, a figure that could climb to $86 billion if every renewal option attached to those leases is eventually exercised. The stock, despite that staggering backlog, was trading at $40.94 as this article was written, up sharply over the past year but still, by some measures, priced as though the market has not fully absorbed what the company has actually built.

This article walks through how Applied Digital assembled that contracted revenue base, what the company's financial reality actually looks like beneath the headline numbers, and what a rational investor should make of a business that is simultaneously one of the more exciting infrastructure stories in AI and one of the more financially strained companies trading on the Nasdaq today.

The Deal That Pushed Applied Digital Past $36 Billion

On June 8, 2026, Applied Digital announced it had signed a 15-year lease covering 210 megawatts of critical IT load at Delta Forge 2, a newly built AI data center campus in an undisclosed southern US state, with a US-based investment-grade hyperscaler. The agreement is structured as a take-or-pay lease, meaning the tenant is contractually obligated to pay for the capacity regardless of whether it ends up using all of it, and it represents approximately $5.2 billion in guaranteed base-term revenue, rising to roughly $12.7 billion if the tenant exercises every renewal option available over a full 30-year term.

That single deal pushed Applied Digital's total contracted portfolio to five AI Factory campuses, spanning 1.4 gigawatts of critical IT load and approximately 2.15 gigawatts of grid-connected utility power, with combined base-term lease revenue of roughly $36 billion, or $86 billion across all five campuses if every renewal option across the entire portfolio is eventually exercised. Approximately 70 percent of that contracted revenue is now backed by US-based investment-grade hyperscalers, a detail that matters considerably to how seriously investors should take the backlog, since investment-grade tenants carry a meaningfully lower risk of default over a 15-year lease term than smaller or less established customers would. Chairman and chief executive Wes Cummins described the company's underlying strategy bluntly, stating that the deliberate decision made two years ago was to build a company that scales rather than one that simply builds individual data centers, a distinction that captures how Applied Digital has positioned itself less as a single-project builder and more as a platform for hyperscale AI infrastructure across multiple sites simultaneously.

Why Hyperscalers Are Locking In Capacity for Decades

To understand why a contract of this size and duration makes sense for the hyperscaler signing it, it helps to understand the constraint actually driving this entire trend. Building the physical infrastructure needed to run large-scale AI workloads, the buildings, the cooling systems, and especially the electrical grid connections capable of delivering hundreds of megawatts of reliable power, takes years and depends heavily on local utility capacity that is not simply available on demand. Hyperscale technology companies racing to deploy AI compute at scale have increasingly concluded that leasing purpose-built capacity from specialized developers like Applied Digital, rather than attempting to build and secure every site themselves, is the faster and more reliable path to getting AI infrastructure online.

This dynamic explains why these leases run for 15 years with 30-year potential terms rather than the shorter commitments more typical of traditional commercial real estate. A hyperscaler signing one of these agreements is not simply renting space. It is securing guaranteed access to scarce grid power and purpose-built data center capacity years before that capacity will actually be ready, locking in supply against a backdrop where demand for AI compute has consistently outpaced what the industry has been able to build. For Applied Digital, this structure delivers something arguably even more valuable than the revenue itself: visibility. A $36 billion contracted backlog provides the kind of long-term, predictable cash flow forecast that allows the company to secure the debt financing needed to actually construct these enormous projects, even before a single one of the newer campuses begins generating revenue.

The Financial Reality Behind the Headline Numbers

Here is where the Applied Digital story becomes considerably more complicated, and where investors need to look past the impressive contracted revenue figure to understand what the company's financial statements actually show today. In its fiscal third quarter of 2026, reported in April, Applied Digital posted revenue of $126.6 million, up 139 percent from the prior year, a genuinely strong growth rate by almost any standard. But the company also reported a net loss attributable to common stockholders of $100.9 million for the quarter, a loss that actually widened by 179 percent compared with the same period a year earlier. The company ended the quarter holding $2.1 billion in cash against $2.7 billion in total debt, a balance sheet that reflects just how capital-intensive building gigawatt-scale data center campuses actually is.

This combination, rapid revenue growth alongside a widening net loss, is not necessarily a contradiction once you understand the company's business model. Applied Digital is in the middle of an extraordinarily expensive multi-year construction program, building out campuses like Delta Forge 1, Delta Forge 2 and Polaris Forge 3 that will not generate meaningful revenue until they are actually completed and energized, a timeline stretching into 2027 and 2028 for several of the newer sites. The company has financed this buildout through a combination of senior secured notes, including a $1.59 billion offering priced in June 2026 and a $2.15 billion note offering completed earlier in the year, alongside development loan facilities and equity draws. None of that debt comes free, and the interest expense, depreciation and construction costs associated with bringing these campuses online are precisely what is driving the net losses showing up on the income statement today, even as the contracted lease revenue underlying the eventual payoff continues to grow.

What 67 Percent Stock Growth Actually Reflects

Against this backdrop, Applied Digital's stock performance over the past year tells a story of a market gradually, if unevenly, coming to terms with the scale of what the company is building. Shares have traded anywhere between roughly $9 and just over $50 over the trailing twelve months, reflecting genuinely significant volatility tied to individual lease announcements, debt offerings, and quarterly earnings reports that have each moved the stock sharply in one direction or the other. Wall Street analysts have, in several cases, raised their price targets substantially as new leases have been announced, with one firm lifting its target from $66 to $83 and another from $45 to $70 in the weeks surrounding recent contract wins, with consensus opinion among analysts who follow the stock leaning toward viewing it as undervalued relative to its current trading price.

That kind of analyst optimism, paired with a stock that has still posted substantial gains over the past year even after accounting for its volatility, suggests the market is at least partially pricing in the value of the contracted revenue backlog, even if the connection between a $36 billion contract book and a sub-$41 share price is not always obvious from the outside. The disconnect that remains is largely a function of timing and risk. A 15-year lease signed today is worth a great deal in present-value terms, but only if the underlying data center is actually built on schedule, brought online without serious technical setbacks, and able to service the substantial debt taken on to construct it. Markets tend to discount distant, conditional cash flows more heavily than companies themselves would like, and Applied Digital's current valuation reflects exactly that kind of discounting.

What a Rational Investor Should Actually Weigh

For anyone considering Applied Digital as an investment, the honest framing requires holding two genuinely different realities in mind simultaneously, rather than collapsing the story into either pure excitement or pure caution. The first reality is that the company has assembled an extraordinarily large, increasingly investment-grade-backed contracted revenue base in a sector, AI infrastructure, that shows no near-term sign of slowing demand. Hyperscalers do not sign 15-year take-or-pay leases worth billions of dollars on a whim, and the fact that 70 percent of Applied Digital's contracted revenue now comes from investment-grade counterparties is a meaningful signal of underlying business quality, not simply growth for growth's sake.

The second reality is that none of that contracted revenue has translated into current profitability, and the company's balance sheet carries real, substantial risk. A $2.7 billion debt load against $2.1 billion in cash, continued reliance on new note offerings and credit facilities to fund ongoing construction, and a net loss that widened rather than narrowed in the company's most recent quarter are not minor footnotes. They are central facts about the company's current financial condition, and they mean that Applied Digital's eventual success depends heavily on executing its construction timeline without serious delays or cost overruns, and on continuing to access capital markets on reasonable terms as it builds out the remaining campuses in its portfolio. Investors comfortable with that kind of construction and execution risk, in exchange for exposure to one of the largest contracted revenue backlogs in the AI infrastructure space, have a coherent case for considering the stock. Investors who prefer businesses already generating consistent profit from their existing operations should recognize that Applied Digital, despite its impressive backlog, is not yet that kind of company, and may not become one for at least another year or two as its newer campuses gradually come online.

The Bottom Line

Applied Digital's $36 billion contracted revenue figure is real, it is growing, and it is increasingly backed by the kind of investment-grade hyperscaler tenants that make a long-term lease portfolio genuinely credible rather than merely aspirational. Whether that makes the stock the most overlooked opportunity of 2026 or simply a high-risk, high-reward bet on flawless execution through a multi-year construction program is a judgment call that depends entirely on an individual investor's tolerance for the kind of near-term losses and balance sheet leverage the company currently carries. What is clear is that the gap between Applied Digital's contracted future and its current financial reality is unusually wide, even by the standards of a sector that has grown accustomed to companies spending heavily today in pursuit of AI-driven growth tomorrow. Whether that gap closes in the company's favor will likely become apparent well before the full 30-year terms of these leases ever play out, as the first wave of newly built campuses begins, or fails, to convert today's contracts into tomorrow's profits.

*This article is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research or consult a licensed financial advisor before making investment decisions. Data referenced is sourced from Applied Digital's SEC filings, GlobeNewswire press releases, Investing.com, TipRanks, Simply Wall St, and StockTitan as of June 2026.*