APLD on December 5, 2025: What Builders, Developers, and EPCs Should Know About the AI Factory Boom
Date: December 5, 2025
Ticker: NASDAQ: APLD
Disclaimer: This article is for information and education only and is not financial advice.
- APLD has pivoted to an AI data-center pure play with two North Dakota campuses and roughly $16B in long-term hyperscale leases.
- Fitch assigned 'BB-' with 'RR3' recovery on new senior secured notes, signaling growth ambition paired with real credit risk.
- 600 MW is leased across two hyperscalers; another 800 MW is optional at Polaris Forge 2, setting up multi-year construction pipelines.
- PUE targets near 1.18 and near-zero water use point to dense, liquid-cooled designs that change MEP, commissioning, and O&M playbooks.
Why this matters to real estate and construction teams
APLD is converting multi-year AI demand into long-duration leases (roughly 15 years) backed by hyperscale tenants. For developers and GCs, that looks and feels like build-to-suit at utility scale-big capex, staged energization, and recurring rent visibility once fully online.
Two campuses-Polaris Forge 1 (Ellendale) and Polaris Forge 2 (near Harwood)-anchor the story. Together they set up a steady run of site work, vertical construction, HV infrastructure, liquid-cooling integration, and phased commissioning through 2027.
Stock check: volatile tape, big move
By late Dec 5, shares traded around $30.56 after swinging between $29.61 and $35.90 intraday. Year-to-date gains sit in the 200%-280% range depending on the source, with a market cap near $8.7-9B and beta around 7. Good to know, but the more actionable insight for builders is pipeline strength and financing quality.
Financing signal: Fitch's 'BB-' on APLD notes
Fitch assigned 'BB-' / 'RR3' to senior secured notes issued by APLD ComputeCo LLC. Sub-investment grade, average recovery expectations. Bond chatter puts coupons near 10%-not cheap capital. The company also has a perpetual preferred equity facility with Macquarie (up to $5B) and a $2.35B notes offering to back the buildout, plus a new $65M revolver.
Translation for project teams: funding exists and is sizable, but it's not risk-free or low-cost. Schedules and milestone certainty matter because slippage can tighten liquidity and squeeze change orders. Stay disciplined on scope, contingencies, and pay-app cadence.
Fitch Ratings | Applied Digital IR
Campus snapshot: what's being built
Polaris Forge 1 (Ellendale): 400 MW fully leased (~$11B)
All 400 MW is under contract with CoreWeave. The first 100-MW building is powered and ready, with the initial 50 MW marked "Ready for Service" in October and the full 100 MW energized in November. The remaining 300 MW phases roll through 2026-2027.
Design calls for closed-loop, direct-to-chip liquid cooling, projected PUE ~1.18, and near-zero water use. That shifts MEP risk from traditional air to liquid manifolds, plate design, and thermal reliability under high density.
Polaris Forge 2 (Harwood area): 200 MW leased (~$5B), 1-GW site potential
A U.S. investment-grade hyperscaler locked in 200 MW with a first right of refusal on another 800 MW. The 200 MW phases in 2026 and reaches full capacity in 2027, with similar PUE and water-sparing targets.
For owners and GCs, the 800-MW option is the headline: it's contingent demand that could turn into a multi-year megaprogram if the tenant triggers expansion.
Revenue mix and where margins show up
Q1 FY26 revenue was $64.2M (+84% YoY), but profits lagged (adjusted EBITDA ~$0.5M). Installation-heavy "tenant fit-out" lifted revenue near term, while recurring lease income ramps as equipment goes live. Expect margin improvement as the mix shifts from build/fit-out to steady rent and services.
Cooling tech and build implications
APLD led a $25M round in Corintis, a Swiss direct-to-chip microfluidic cooling company. The pitch: cooler chips, higher density, hotter coolant tolerance, lower freshwater needs. For delivery teams, this means tighter tolerances, coordination with OEMs, and more commissioning time on fluid dynamics, leak detection, and failover paths.
Practical takeaways for developers, EPCs, and trades
- Site control and interconnect: Mega-sites need proximity to robust transmission, substation capacity, and fast-track interconnects. Early utility engagement beats late heroics.
- Phasing discipline: 50-100 MW blocks with overlapping schedules demand repeatable room templates, prefab skids, and rigorous turnover checklists.
- Liquid-cooling readiness: Design around manifolds, plate swaps, fluid quality, and maintenance access. Treat fluids like you treat power-critical path, not an afterthought.
- Commissioning: Plan for extended IST and thermal soak under realistic load. Over-invest in monitoring; it pays back in warranty avoidance.
- Contracts: Given leverage and bond covenants, clarity on milestones, LDs, and change-order protocols protects both sides. Cost certainty (GMP with defined allowances) will be favored.
- Workforce: Train controls techs and pipefitters for microfluidic systems, not just traditional HVAC. Shift foremen and PMs into data-centric scheduling and QAQC.
Risk signals to price into bids
- Leverage: 'BB-' debt and ~10% coupons increase sensitivity to delays. Carry stronger schedule contingency and cash flow protections.
- Scope creep: Tenant GPU generations evolve quickly. Lock spec freeze windows and define change premiums up front.
- Supply chain: Long-lead electrical gear remains a choke point. Pre-buy strategies and owner-furnished equipment can de-risk timelines.
- Competition: Hyperscalers and data-center REITs are building similar capacity. Expect tight pricing and high expectations on PUE and uptime.
What to watch next (construction and RE focus)
- Lease revenue ramp at the first 100-MW PF1 building as it transitions from installation to full billing.
- PF1 and PF2 construction milestones, energization dates, and any updates on the 800-MW expansion right at PF2.
- Financing updates on the $2.35B notes and Macquarie draws; any rating changes or shifts in lending terms.
- New campus announcements or land options that extend the pipeline beyond the current ~$16B in contracted revenue.
- Profitability trend as the mix tilts toward recurring leases and GPU services.
Valuation and sentiment (for context)
Analyst targets cluster from mid-$20s to low-$40s; some models mark fair value near the low-$40s, while others call out rich revenue multiples (16×-33×). Insiders have been net sellers; institutions have been net buyers. High expectations are now baked in.
Bottom line for builders and owners
APLD's AI campuses are a live example of where the next wave of industrial real estate is heading: power-rich land, liquid-cooled density, and multi-billion-dollar leases. If you can deliver repeatable, high-voltage, liquid-cooled blocks on tight phasing, there's a long runway here-just price the schedule risk like it matters, because it does.
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