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Applied Digital's $36B Bet: When Does the Rent Arrive?
8 Sep
Summary
- Company has $36 billion in leases for AI data centers.
- Only 175 MW of contracted capacity is currently operational.
- Significant construction delays could allow tenants to terminate leases.
Applied Digital has entered into significant lease agreements for AI data centers, projecting $36 billion in revenue over 15 years. However, as of late July 2026, only 175 MW of the planned capacity is operational. The company's revenue for fiscal year 2026 was $611.3 million, with a net loss of $249.2 million.
Rental revenue recognition begins only when properties are ready for use and tenants take possession. The gradual nature of these payments is highlighted by the projected figures: $451 million in fiscal 2027, $1.45 billion in fiscal 2028, and $2.25 billion in fiscal 2029. Deliveries are phased, with significant construction for Polaris Forge 2 expected to begin coming online in calendar 2026.
The company's capital expenditures reached $2.87 billion in fiscal 2026, and it reported $5.0 billion in debt against $4.2 billion in cash. Lenders and preferred equity holders receive payments before common shareholders. Given that most buildings are not yet constructed, investors are advised to monitor construction progress before considering an investment.
