Applied Digital: A lot Of Irons In The Forge

Research evidence excerpt

Applied Digital: A lot Of Irons In The Forge

Thomas Egan, CFA AC North America Credit Research

(1-212) 270-2149 28 July 2026 J P M O R G A N

thomas.j.egan@jpmorgan.com

outlay funded in the project bond markets, benefiting from leases with the same high-IG

hyperscaler. Macquarie will fund 75% of the equity through their $5bn JV, with the

remaining equity funded from APLD’s balance sheet, including its $430mn RCF (S

+225bp). Applied still plans to refinance its more expensive high-yield project debt with

cheaper funding (CMS, ABS, or the IG market) once the lease has commenced and less

construction risk is on the table. Given what has happened to funding markets, the only

coupon that looks “more expensive” are the 9.25% Notes. However, beyond coupons,

duration and covenants also matter and could drive refinancing even of lower coupon

debt.

• What else is in the works? In addition to the 1.4 GW leased and in construction, Applied

is actively marketing an additional 1.7 GW across multiple states and expects this new

capacity to command higher pricing. The pipeline includes advanced negotiations with

Oracle for a ~100 MW expansion of Polaris Forge 2, and another IG customer for a ~150

MW upsize at one of the Delta Forge campuses. Management expects these expansion

leases to be executed on substantially the same terms as the customers’ current lease

agreements, but at materially higher lease rates and possibly longer duration. For future

leases, management is targeting IG hyperscalers and avoiding large AI labs.

Figure 3: Total Unfunded Pipeline

Parent Project Size Tenant $/MW est. Est. Project Cost

Applied Digital Delta Forge 1 300 MW IT Same high IG hyperscaler $11-13mn per MW IT $3,600.00

Polaris Forge 3 300 MW IT Same high IG hyperscaler $11-13mn per MW IT $3,600.00