Applied Digital Stock Slips Despite Securing $11 Billion AI Hosting Contract

In a surprising market reaction, shares of Applied Digital (NASDAQ: APLD) declined 4-5% on Friday even as the company announced a monumental new agreement with artificial intelligence cloud provider CoreWeave. The sell-off highlights the complex dynamic between securing long-term growth and managing near-term financial pressures that high-expansion technology firms often face.

The newly finalized contract represents a third expansion at Applied Digital’s Polaris Forge 1 campus in North Dakota, adding 150 megawatts of capacity. This latest deal brings the total planned capacity at the site to 400 MW and elevates the total expected revenue from all contracts with CoreWeave to approximately $11 billion.

A detailed timeline outlines the phased activation of this new capacity:
* The first 100-MW data center is scheduled to come online in Q4 2025
* A second 150-MW facility is planned for mid-2026
* The newly announced 150-MW expansion is targeted for full operation in 2027

Despite the significant long-term revenue visibility provided by this agreement, APLD shares closed the trading session at $15.93, reflecting a decline of over 4%.

Should investors sell immediately? Or is it worth buying Applied Blockchain?

This negative price movement underscores a common challenge for growth-stage companies. Although the CoreWeave deal provides substantial future revenue, the market is currently focused on the significant capital expenditures required to construct these advanced data centers. Recent quarterly results have shown net losses despite rising revenue—a pattern of heavy reinvestment that some investors view as increasing near-term risk.

The broader technology sector’s weakness on Friday added further downward pressure. Sector leaders including Nvidia and Broadcom traded lower, contributing to a wider pullback that affected Applied Digital and other tech equities.

All attention now turns to execution. Applied Digital’s primary challenge is to demonstrate it can deliver on its ambitious construction schedule on time and within budget. The successful activation of the initial 100-MW facility in late 2025 is poised to be a critical milestone; timely completion could serve as a major catalyst for restoring investor confidence.

The Polaris Forge 1 campus offers significant advantages for future scaling, with a potential total capacity of up to 1 gigawatt. North Dakota’s climate is also particularly well-suited for the energy-efficient, water-free cooling systems essential for modern computing needs. The company’s ability to ultimately convert its long-term potential into sustained profitability is entirely dependent on flawless project execution in the coming years.