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DALLAS - Applied Digital Corporation (NASDAQ:APLD) is expected to receive $787.5 million in additional equity funding from Macquarie Asset Management to accelerate the development of its AI data center campuses in North Dakota, according to a press release statement issued Wednesday. The company's stock, which has seen a 276% gain over the past year according to InvestingPro data, recently experienced significant volatility with a 13.7% decline in the past week.
The funding is part of a previously disclosed perpetual preferred equity financing facility of up to $5 billion with Macquarie. The anticipated draws are expected to be completed by the end of November. This capital infusion comes as InvestingPro analysis shows Applied Digital operating with a moderate debt level, with a debt-to-equity ratio of 0.67, while analysts anticipate robust sales growth in the current fiscal year.
Of the total amount, $450 million will be allocated toward completing the Polaris Forge 2 campus in Harwood, North Dakota. This facility has already leased 200 MW of critical IT capacity to a U.S.-based investment grade hyperscaler, which also holds first right of refusal for an additional 800 MW at the site.
The remaining $337.5 million will fund the Polaris Forge 1 campus in Ellendale, North Dakota, subject to the closing of Applied Digital's previously announced $2.35 billion senior secured notes offering and other conditions.
"This funding underscores the continued execution of our AI infrastructure strategy," said Wes Cummins, Chairman and CEO of Applied Digital.
The company also secured a $65 million revolving loan agreement with First National Bank of Omaha on November 10. Interest on the outstanding balance will accrue at a rate of SOFR plus 2.75% per annum, with the loan secured by the company's assets.
Applied Digital designs, builds, and operates data centers for artificial intelligence, cloud, and blockchain workloads. The company recently achieved its "Ready-for-Service" milestone for its first data hall at Polaris Forge 1, with both North Dakota campuses reportedly remaining on schedule. According to InvestingPro data, the company's market capitalization stands at approximately $8 billion, with analysts setting price targets significantly above current levels. Investors seeking deeper insights can access the comprehensive Pro Research Report available for Applied Digital, one of 1,400+ US equities covered with detailed analysis on the platform.
In other recent news, Applied Digital Corporation has announced several significant developments. The company has completed the first 50-megawatt phase of its Polaris Forge 1 AI Factory Campus in Ellendale, North Dakota, which is part of a fully leased 400 MW deployment for CoreWeave, expected to generate approximately $11 billion in lease revenue over 15 years. Additionally, Applied Digital has secured a $5 billion lease agreement with a U.S.-based investment-grade hyperscaler at its Polaris Forge 2 campus, covering 200 MW of critical IT load. This brings the company's total leased capacity in North Dakota to 600 MW.
Furthermore, Applied Digital's subsidiary, APLD ComputeCo LLC, plans to offer $2.35 billion in senior secured notes to fund the construction of two new data centers at the Ellendale campus. In another development, shareholders approved an increase of 15 million shares in the company's 2024 Omnibus Equity Incentive Plan during their annual meeting. Meanwhile, Babcock & Wilcox has entered into a $1.5 billion agreement to deliver one gigawatt of power for an Applied Digital AI facility, with operations expected to begin in 2028. These recent activities highlight significant growth and expansion efforts by Applied Digital in the AI and data center sectors.
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