Applied Digital’s stock has become the beneficiary of Nvidia’s investment in CoreWeave, which recently became a hyperscale tenant at APLD’s first AI factory.
- Shares of Applied Digital have gained more than 68% so far in January, mainly building on the news of breaking ground on Delta Forge 1, an AI Factory campus.
- Applied Digital’s Polaris Forge 1 AI Factory Campus, which is a 100-megawatt building in North Dakota, has been ready for service, and its first hyperscale tenant at the building is CoreWeave.
- On Monday, Nvidia invested $2 billion in CoreWeave by purchasing 22.7 million shares at $87.20 per share.
Applied Digital on Tuesday jumped more than 14% to close at an all-time high of $41.35 and extended gains after-hours as its hyperscale tenant, CoreWeave, received another $2 billion investment from Nvidia to accelerate the buildout of more than 5 gigawatts of AI factories by 2030.
CoreWeave and Applied Digital’s more than six-month-old partnership began with the companies signing two 15-year leases, with the former expected to generate about $7 billion in revenue for the data center operator over the lease period.
APLD’s Stock Move
Shares of Applied Digital have gained more than 68% so far in January, largely on news of breaking ground on Delta Forge 1, an AI Factory campus in a strategic southern U.S. market, which is designed to support an initial 430 megawatts of total utility power, enabling up to 300 megawatts of critical IT load with the ability to scale considerably in 2028 and beyond.
Roth Capital said it believes the site is in Louisiana and expects a formal lease with another hyperscaler in the coming months. Applied Digital remains a top pick, said Roth Capital, which has a ‘Buy’ rating and $58 price target, according to The Fly.
The company’s stock rose nearly 3% in overnight trading, according to Yahoo Finance, and is set for its second straight day of a winning streak if gains hold during market trading on Wednesday.
APLD And CoreWeave’s Partnership
Applied Digital’s Polaris Forge 1 AI Factory Campus, which is a 100-megawatt building in North Dakota, has been ready for service, and the first hyperscale tenant at the building is CoreWeave. The completion of the building marked the initial delivery of a fully leased 400-megawatt critical IT load deployment for the company under the 15-year lease agreements.
In early January, Applied Digital said that CoreWeave paid about $85 million in the second quarter, including $73 million for tenant fit-out activities, and the former recognized $12 million in partial-quarter lease revenue.
Applied Digital has been working to develop a path to high-power-density data centers offering high-performance computing for artificial intelligence and has changed its name from Applied Blockchain to Applied Digital.
Nvidia And CoreWeave
Nvidia has backed CoreWeave for a long time and invested $2 billion in the latter’s stock at a purchase price of $87.20 per share. The investment reflects Nvidia’s efforts to scale with the growing demand for AI.
The investment would help the companies build AI factories developed and operated by CoreWeave, using Nvidia’s leading accelerated computing platform technology to meet customer demand. It would also help leverage Nvidia’s financial strength to accelerate CoreWeave’s land, power, and shell procurement for AI factory construction.
What Is Retail Thinking?
Retail sentiment on Applied Digital has jumped to ‘bullish’ from ‘neutral’ a week ago, with message volumes at ‘high’ levels, according to data from Stocktwits. In the last 24 hours alone, retail message volume about APLD on Stocktwits jumped 43%.
A bullish user on Stocktwits noted that APLD stock should break the $42 mark during overnight trading.
Shares of APLD have jumped more than 500% in the last 12 months.
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