APLD Signs $20B Take-or-Pay Leases, Concentrating Hyperscaler Revenue
Applied Digital is expanding its AI data center platform, but its reliance on a small group of hyperscalers is increasing revenue concentration. Three newly signed 15-year take-or-pay leases with the same investment-grade hyperscaler total about $20 billion in contracted revenues, spanning multiple states. In fiscal 2026, one HPC customer drove 59% of continuing-ops revenue, leaving limited diversification. Risks include reduced usage or discontinuation impacting lease pricing, margins, cash flow, though take-or-pay terms provide protection.