Applied Digital Shares Surge 40% on 250 MW AI Lease with CoreWeave

Applied Digital (Nasdaq: APLD) saw its stock surge 40% on Monday after announcing an AI data center lease agreement with Wall Street’s latest AI standout, CoreWeave.

The two companies signed approximately 15-year lease agreements totaling 250 megawatts (MW) of critical IT load at Applied Digital’s Ellendale, North Dakota, campus. The deal, which is touted for $7 billion in revenue over its term, positions Ellendale as a major hub for AI and high-performance computing (HPC) expansion.

CoreWeave also holds an option to lease an additional 150 MW at the site. The first 100 MW facility is expected to be operational by late 2025, with a second 150 MW center slated for completion in mid-2026. A potential third facility is in the planning stages, targeting a 2027 launch.

The stock rally reflects renewed investor enthusiasm for AI-related infrastructure investments, echoing last year’s surge in Core Scientific (NASDAQ: CORZ)’s shares when it announced a similar leasing deal with CoreWeave. Applied Digital shares were trading at $9.66 as of writing, representing a 40% intraday gain and pushing the company’s market capitalization above $2 billion.

Originally a GPU mining colocation provider focused on Ethereum, Applied Digital later pivoted to hosting Bitcoin mining operations for MARA and has also diversified into AI infrastructure. Notably, in January 2024, the Ellendale facility experienced a full power outage, causing significant downtime for MARA. Operations were restored by the end of June 2024.

CoreWeave, which recently went public, has been rapidly expanding its infrastructure to serve a growing base of AI clients. Its collaboration with Applied Digital underscores a broader trend of mining data center operators pivoting towards AI and HPC workloads to offset declining margins in Bitcoin mining.

Galaxy Digital, for instance, is scaling back Bitcoin mining at its Texas Helio facility to lease data center capacity to CoreWeave, following a similar strategy.