Applied Digital Splits Cloud Business as $23 Billion Order Book Fuels AI Infrastructure Push

Applied Digital completes restructuring, spinning off cloud division as ChronoScale while retaining 97% stake. Focus shifts to data centers with $23B backlog and $300M Goldman Sachs loan.

Applied Digital has completed a sweeping corporate restructuring, spinning off its cloud division as a standalone publicly traded company called ChronoScale while retaining a commanding 97% stake through roughly 138 million shares. The parent company also injected $15.75 million in cash into the new entity. The move sharpens the group's focus on data center hosting and operations, with the separation designed to give each unit better access to tailored financing.

The strategic pivot comes as Applied Digital sits on a contract backlog that the company pegs at $23 billion, though one of the source articles cites a figure of $16 billion — the discrepancy likely reflects different stages of contract recognition or pipeline updates. CoreWeave accounts for an estimated $11 billion of that total, while a separate $5 billion agreement with a major hyperscaler covers the Polaris Forge 2 site. The cornerstone of the infrastructure portfolio is the Delta Forge 1 campus, which already has a lease agreement worth $7.5 billion and is designed for 430 megawatts of capacity.

To fund the next phase of expansion, Applied Digital secured a $300 million bridge loan led by Goldman Sachs. The proceeds are earmarked for constructing a third AI data center in Ellendale, North Dakota, a region that is becoming a hub for the company's capacity buildout. The financing is critical for working through the massive order backlog, which is largely backed by 15-year contracts with financially robust hyperscale customers, providing strong visibility into future cash flows.

The market has taken notice. Shares recently surged 11.6% in a single session, while options activity exploded with over 157,400 contracts changing hands in one day. Investors are betting on capacity, focusing on the long-term demand for computing power. The company's market capitalization currently stands at roughly $10.18 billion.

Yet the financial picture remains mixed. Revenue jumped 139% to $126.6 million in the latest quarter, but Applied Digital posted a net loss of $100.9 million. Critics point to a debt load of approximately $2.7 billion. Analysts remain broadly bullish, with an average of 12 buy ratings and a price target of $53.91, though targets range from $40 to $53. The commissioning of new capacity will be a key test for long-term refinancing, and investors are now watching operational milestones to determine whether the valuation gap with competitors can narrow.