Applied Digital Corporation announced on March 2, 2026 that its subsidiary, APLD ComputeCo 2 LLC, will issue $2.15 billion of senior secured notes due 2031. The notes will be sold in a private placement to qualified institutional buyers under Rule 144A and to certain non‑U.S. investors under Regulation S.
The proceeds will be used to build a 200‑megawatt IT load at the Polaris Forge 2 AI Factory campus in Harwood, North Dakota. The campus, a 280‑megawatt AI factory, is slated to begin operations in 2026 and reach full capacity by early 2027. A long‑term lease agreement with a U.S. investment‑grade hyperscaler could generate roughly $5 billion of revenue over 15 years, anchoring the project’s financial foundation.
The new debt will raise Applied Digital’s debt‑to‑equity ratio to 1.8. The company’s operating margin stands at –27.96 % and its net margin at –58.23 %, while an Altman Z‑Score of 1.77 places it in the distress zone. The additional leverage underscores the company’s aggressive capital‑intensive growth strategy and the associated financial risk.
Applied Digital’s pivot from cryptocurrency mining to AI and high‑performance computing is a core part of its strategy. The company has partnered with ABB to supply medium‑voltage UPS technology and switchgear for its AI factories, and it has secured a partnership with a major hyperscaler to anchor the Polaris Forge 2 lease. CEO Wes Cummins emphasized the firm’s execution advantage, stating, "What sets us apart isn't just the size of our pipeline – it's how fast we can deliver. The real constraint in this industry is execution, and our team continues to prove that large‑scale, next‑generation data centers can be designed, financed, and brought online faster and more efficiently than anyone thought possible."
Investors have reacted cautiously to the announcement, citing concerns over the increased debt load and the capital‑intensive nature of the expansion. Management’s confidence in execution and the long‑term lease agreement, however, suggest a belief that the project will generate substantial revenue and strengthen the company’s position in the AI infrastructure market.
The financing marks a significant milestone in Applied Digital’s transformation strategy. While the debt increase heightens financial risk, the company’s focus on rapid deployment, strategic partnerships, and a secured lease agreement aim to deliver a robust revenue stream that could offset current losses and support future growth in the AI and HPC sectors.
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