Applied Digital Surges 19% on Expanded CoreWeave AI Data Center Deal
The expanded partnership with AI hyperscaler CoreWeave is expected to generate $11 billion in total contracted revenue, signaling strong investor confidence.
Shares of Applied Digital (APLD) surged more than 19% after the company announced a significant expansion of its partnership with artificial intelligence hyperscaler CoreWeave. The deal, which reinforces Applied Digital's key role in the booming AI infrastructure sector, has boosted the total expected revenue from the partnership to approximately $11 billion over a 15-year term.
The rally was ignited by news that Applied Digital finalized a new lease agreement for an additional 150 megawatts (MW) of capacity at its data center campus in Ellendale, North Dakota. This expansion brings the total contracted IT load with CoreWeave at the facility to 400 MW, fully leasing the campus and solidifying a long-term, high-value revenue stream for the company. Investor enthusiasm was palpable, as the deal underscores the immense demand for specialized data centers capable of handling the high-performance computing required for AI workloads.
This move is a significant step in Applied Digital's growth strategy. The company's management projects an annualized net operating income (NOI) of $1 billion within five years, driven largely by these long-term leases. , the Ellendale campus is designed for significant scalability, with the potential to eventually reach 1 gigawatt of power, positioning Applied Digital as a critical infrastructure provider in the AI revolution.
The stock's upward momentum was also supported by . The company reported revenue of $64.2 million, surpassing analyst estimates, and a narrower-than-anticipated adjusted loss of $0.03 per share. This strong financial performance, combined with the landmark CoreWeave deal, has provided a powerful catalyst for the stock.
The partnership timeline indicates a rapid deployment schedule to meet urgent AI demand. The first 100 MW data center for CoreWeave is expected to be ready in the fourth quarter of 2025, with the newly announced 150 MW facility slated to be operational by mid-2026. This expansion not only secures Applied Digital's revenue for years to come but also as a pivotal player in the build-out of next-generation digital infrastructure.