Applied Digital's $3.6B Delta Forge 1 project adds 1.2GW AI capacity. The stock rose 6%. Next catalyst: funding details and tenant commitments before construction.
Applied Digital (APLD) announced a $3.6 billion investment in the Delta Forge 1 AI factory in Louisiana, a project that will reach 1.2GW of capacity. Shares responded with a ~6% gain to ~$48.14, extending a rally built on the company's pivot from crypto mining to high-performance computing and AI infrastructure.
The size and scale of the commitment puts Applied Digital in a different conversation. A 1.2GW facility dedicated to AI workloads places it alongside larger players in the hyperscaler-adjacent data center market. The Louisiana location offers access to power grids and tax incentives that have drawn similar AI projects to the region in recent quarters.
The market for AI data centers has shifted from speculative land banking to real construction spending. Hyperscalers like Microsoft and Amazon are contracting multi-gigawatt blocks to support large language model training and inference. Applied Digital is betting that mid-scale, colocation-style factories can capture overflow demand from the largest cloud providers or serve enterprise AI clients that want dedicated clusters without building their own.
At $3.6 billion for 1.2GW, the implied cost per megawatt runs around $3,000 per kilowatt, in line with recent industry benchmarks for greenfield AI data center builds. That does not include power infrastructure upgrades or grid interconnection costs, which can add 20-30% in some regions. The project's final economics will depend on lease rates, utilization, and the speed at which Applied Digital can bring capacity online.
Applied Digital is not a balance-sheet giant. Financing a $3.6 billion project will require a mix of debt, equity, and possibly project-level joint venture partners. The company has previously used at-the-market equity offerings, which dilute existing holders. The next concrete catalyst for the stock is the funding announcement – whether APLD secures a bank syndicate, a strategic investor, or a pre-lease from a major tenant.
Execution risk is real. The company must navigate construction timelines, equipment supply chains for GPUs and networking gear, and power procurement in a competitive Louisiana market. A delay or cost overrun would compress margins on what is already a low-margin infrastructure business.
Investors should watch for two signals: a binding off-take agreement with a named tenant before breaking ground, and a capital structure update that shows how much equity dilution is required. Until then, the share price reflects optimism around the size of the opportunity rather than proof of delivery.
The AI infrastructure build-out has rewarded first movers with strong execution track records. Applied Digital is still building that track record. The Delta Forge 1 project is the clearest test yet of whether APLD can scale from niche operator to serious contender in the AI data center race. For related context on the broader sector, see our coverage of high-and-heavy equipment makers tap into data centers for growth and the general stock market analysis.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.