What Happened?
Shares of digital infrastructure provider Applied Digital (NASDAQ: APLD) jumped 6.6% in the morning session after the stock extended its impressive winning streak, driven by positive momentum from recent major contracts in the artificial intelligence (AI) infrastructure space.
The rally marked the tenth consecutive day of gains, pushing the stock's cumulative return to 47% over that period. This surge followed recent announcements of expanded data center lease agreements with cloud provider CoreWeave. These deals increased Applied Digital's total contracted capacity to 400 megawatts and were expected to secure roughly $11 billion in future lease revenue. The developments highlighted the company's pivot towards high-performance computing for AI, tapping into a booming market. The broader AI infrastructure sector showed strong demand, and the company's connection to key players was also noted, as Nvidia included Applied Digital in its portfolio of AI stock investments.
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What Is The Market Telling Us
Applied Digital’s shares are extremely volatile and have had 95 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 7% on the news that investors continued to cheer the company's major artificial intelligence (AI) infrastructure contract announced the previous day, supported by positive sector-wide news. The stock's momentum is largely a continuation from the previous day's news that a new lease agreement with CoreWeave brought Applied Digital's total anticipated contracted lease revenue to approximately $11 billion. This highlights the company's successful pivot to powering AI technologies. Bolstering investor confidence, the broader AI and data center market saw positive developments. Oracle's recent blockbuster deal with OpenAI and Super Micro Computer's announcement that it is shipping products with Nvidia's high-demand Blackwell chips signal a strong spending environment for AI infrastructure.
Applied Digital is up 196% since the beginning of the year, and at $23.11 per share, has set a new 52-week high. Investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $350,081.
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