What Happened?
Shares of digital infrastructure provider Applied Digital (NASDAQ: APLD) jumped 10.4% in the morning session after a major $17.4 billion deal between Microsoft and Nebius Group sparked a rally among companies with large-scale computing infrastructure.
The agreement, which runs through 2031, will see Netherlands-based Nebius provide dedicated GPU capacity to support Microsoft's artificial intelligence operations. This news sent shares of cryptocurrency mining and data center firms soaring as investor focus shifted to the broader potential of their infrastructure in powering AI systems. The rally highlights growing enthusiasm for companies positioned to meet the high demand for computing power. Applied Digital is among the beneficiaries of this trend, having previously announced its own significant high-performance computing (HPC) hosting agreements, including a new lease that brought its total contracted revenue to approximately $11 billion.
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What Is The Market Telling Us
Applied Digital’s shares are extremely volatile and have had 97 moves greater than 5% over the last year. But moves this big are rare even for Applied Digital and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 2.5% on the news that a dismal August jobs report stoked fears of a significant economic slowdown. The U.S. economy added a mere 22,000 jobs, falling dramatically short of the 75,000 analysts had anticipated. This figure, combined with downward revisions for the previous two months and an unemployment rate that climbed to 4.3%, painted a stark picture of a cooling labor market. The report has intensified debates on Wall Street about whether the slowdown is enough to prompt a supportive interest rate cut from the Federal Reserve, or if it's a precursor to a more serious recession. Some economists expressed significant concern, with one noting the labor market appears to have "headed off a cliff edge." The data suggests that businesses are pausing hiring amidst economic uncertainty, increasing worries about broader economic trouble ahead.
Applied Digital is up 110% since the beginning of the year, and at $16.41 per share, it is trading close to its 52-week high of $16.70 from August 2025. Investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $273,421.
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