Applied Digital Corporation (APLD) stock skyrockets 48.46% to $10.14 after securing $7 billion deal with CoreWeave.

Applied Digital Corporation (APLD) saw its share prices surge 48.46% to $10.14 on Monday after announcing a $7 billion deal with CoreWeave. The deal involves a 15-year lease agreement for 250 megawatts of critical IT load at APLD's Ellendale data center campus to host CoreWeave's AI and HPC infrastructure. The campus is designed for speed and efficiency and expects to deliver the first 100 MW in Q4 2023, with the remaining 150 MW coming online in mid-2026.

Applied Digital Corporation (APLD) saw its share prices surge 48.46% to $10.14 on Monday after announcing a $7 billion deal with CoreWeave. The deal involves a 15-year lease agreement for 250 megawatts (MW) of critical IT load at APLD's Ellendale data center campus to host CoreWeave's artificial intelligence (AI) and high-performance computing (HPC) infrastructure. The campus is designed for speed and efficiency, with the first 100 MW expected to be delivered in the fourth quarter of 2025, followed by the remaining 150 MW in mid-2026 [2].

Both Applied Digital and CoreWeave are backed by Nvidia (NVDA), the second-most valuable company in the world and a key player in the rise of artificial intelligence. Nvidia held approximately 7.7 million shares of Applied Digital and 24.2 million shares of CoreWeave as of March 31, according to a regulatory filing [1].

CoreWeave provides its clients with access to data centers, which are used to develop AI models. The company’s data centers are equipped with Nvidia chips. Shares of CoreWeave rose about 8% on Monday, reflecting investor enthusiasm for the deal [1].

The deal is expected to generate $7 billion in total revenue over the decade-and-a-half span, providing Applied Digital with unprecedented visibility into its future cash flows. This level of contracted revenue provides a strong foundation for further investment, expansion, and potential margin improvement [2].

The market's response was swift and decisive. Shares of APLD surged as investors digested the magnitude of the CoreWeave deal. The nearly 50% jump in share price reflects both the immediate financial impact and the long-term strategic value of the agreement. In a session where the broader market was mixed, with the Nasdaq edging up just 0.21%, Applied Digital stood out as a clear leader among technology and infrastructure stocks [2].

The AI revolution is driving an unprecedented need for specialized data centers. Traditional facilities often lack the power density, cooling, and connectivity required for AI workloads. Companies like CoreWeave are at the forefront of deploying large-scale AI and high-performance computing infrastructure, and they are seeking partners capable of delivering reliable, scalable solutions [2].

Applied Digital’s ability to secure a long-term, high-value lease with a leading AI hyperscaler demonstrates its competitive edge in this rapidly evolving landscape. The company’s focus on energy-efficient, high-capacity campuses in strategic locations positions it to benefit from the secular tailwinds propelling the AI and HPC industries [2].

Looking ahead, Applied Digital’s immediate priorities will include completing construction on the North Dakota facilities, meeting service delivery milestones, and potentially expanding the campus to accommodate additional demand. The structure of the leases includes performance incentives and penalties, ensuring a strong focus on operational excellence [2].

With the CoreWeave agreement in place, Applied Digital is poised for a new phase of growth. The company’s scalable infrastructure and proven execution make it a compelling partner for organizations seeking to deploy AI and HPC workloads at scale [2].

References:
[1] https://www.investopedia.com/applied-digital-stock-soars-on-ai-data-center-deal-with-nvidia-backed-coreweave-11746792
[2] https://www.wealthdaily.com/applied-digital-corporation-apld-why-shares-soared-48-on-a-landmark-ai-data-center-deal/