Applied Digital Adjusts CoreWeave Lease, Needham Says Capital Costs May Decline

Gate News message, April 16 — Applied Digital (APLD.US) recently renegotiated its lease agreement with CoreWeave (CRWV.US) for a North Dakota data center, a move Needham believes could lower the company’s capital costs. Under the revised terms, Applied Digital’s lenders are now backed by investment-grade (IG-rated) credit entities rather than CoreWeave’s BB-rated parent company, potentially reducing the company’s project-level debt costs over time.

Needham analysts noted in their report that this adjustment shifts credit risk exposure, allowing Applied Digital to benefit from improved financing terms. The firm maintains a “buy” rating on Applied Digital with a $41 price target, despite the stock falling after the company reported third-quarter earnings that exceeded expectations.

A similar dynamic could benefit Core Scientific (CORZ.US), according to Needham. If Core Scientific’s leased computing capacity from CoreWeave ultimately serves investment-grade clients such as Meta or Anthropic, the company would face lower credit risk and potentially access better financing conditions. Needham rates Core Scientific “buy” and CoreWeave “hold.”

Applied Digital’s third-quarter results beat forecasts, with execution progressing as expected. The company is currently awaiting lease agreements with hyperscale customers.