Applied Digital Shares Surge 48% on $7 Billion AI Lease with CoreWeave
Applied Digital’s shares jump 48% following a $7 billion, 15-year lease agreement with CoreWeave, marking a significant milestone in AI data center infrastructure. This deal positions Applied Digital for strong revenue growth and strategic expansion in high-performance computing.
Shares and Market Reaction
- Applied Digital’s stock rises 48% after announcing the lease.
- CoreWeave shares climb about 8% amid positive market sentiment.
- CoreWeave recently hit a record high of $130.76 on May 29, rising from $39 in late March.
Details of the Lease Agreement
The agreement provides for approximately $7 billion in rental revenue over roughly 15 years. Pricing terms are fixed upfront with an annual escalator, ensuring predictable revenue despite fluctuating project costs.
| Key Term | Details |
|---|---|
| Lease Duration | Approximately 15 years |
| Rental Revenue | $7 billion total expected |
| Pricing | Set upfront with annual escalator |
Strategic Expansion and Infrastructure
Applied Digital CEO Wes Cummins highlights the lease as a key step in expanding advanced compute infrastructure. CoreWeave will operate AI and high-performance computing services at Applied Digital’s Ellendale, North Dakota campus.
Data Center Capacity and Power Load
- Applied Digital will supply 250 megawatts (MW) of critical IT load to CoreWeave.
- The Ellendale campus is designed for up to 400 MW total load.
- The lease covers two data cell blocks: one 100 MW and one 150 MW facility.
- CoreWeave holds an option to lease an additional 150 MW data cell block.
Key Takeaways
- Applied Digital’s shares gain 48% after a major lease with CoreWeave.
- The $7 billion lease spans 15 years with fixed pricing and escalators.
- This deal advances Applied Digital’s role in AI infrastructure.
- CoreWeave benefits from increased AI server deployment capacity.
- The Ellendale campus plans significant power capacity to support AI workloads.
Applied Digital Shares Rip 48% Higher on $7 Billion CoreWeave AI Lease Agreement
Applied Digital’s shares jump an eye-popping 48% following the announcement of a major $7 billion AI lease deal with CoreWeave. This deal not only shakes up the data center landscape but also signals a strong bullish sentiment on Applied Digital’s future prospects in AI infrastructure. Let’s unpack why this matters and what it means going forward.
You might wonder: How can a lease agreement create such a seismic impact on a company’s stock? The key lies in the size, duration, and strategic nature of the contract. Applied Digital’s recent deal with CoreWeave, powered by Nvidia chips, is a game changer.
Share Price Moves: A Tale of Two Companies
Applied Digital didn’t just see a minor bump; its shares surged 48%, reflecting investor excitement. CoreWeave also caught the wave, rising about 8% after the news. This makes sense since CoreWeave, backed by Nvidia—the king of GPU tech for AI—provides the hardware to power this future-forward AI data center.
CoreWeave’s stock story itself is a rocket ride. It started March 28 at $39 and zoomed to a record $130.76 by May 29. That’s nearly a 3.5x increase in just two months, fueled by growing demand for AI server capacity. With Applied Digital’s commitment now locked in, CoreWeave’s future looks even brighter.
Dissecting the Lease: $7 Billion Over 15 Years
The headline $7 billion figure is not fluff. It represents the expected rental revenue over roughly 15 years from two long-term leases signed by Applied Digital with CoreWeave. Think about that: a guaranteed, upfront price with an annual escalator. This means Applied Digital locks in its revenue streams regardless of any swings in project costs—a financial safety net for investors.
These leases cover two data cell blocks: one delivering 100 megawatts and the other 150 megawatts of IT load capacity. That’s a hefty 250 MW total—massive muscle unloaded in North Dakota. Plus, CoreWeave holds the option for a third 150 MW block. So there’s room to scale.
Building the Future: Strategic Expansion and AI Compute Infrastructure
Applied Digital CEO Wes Cummins captures the gravity of this move: “Through these newly signed long-term leases with CoreWeave, we are taking a step forward in our strategic expansion into advanced compute infrastructure.” This isn’t merely another data center—it’s a strategic footprint in the fast-evolving AI ecosystem.
The data center campus in Ellendale, North Dakota, is designed to handle 400 MW total, so Applied Digital’s infrastructure is future-proofed for growth. The 250 MW committed to CoreWeave is just a strong start.
Why focus on AI and high-performance computing? Because AI workloads need massive compute power, low latency, and reliable energy sources. Data centers are the backbone of AI’s explosion, and partners like CoreWeave supply the specialized servers powered by Nvidia’s industry-leading GPUs.
The Power Behind the Power: Data Center Capacity and Load Details
Applied Digital is bringing some serious wattage to the table—250 megawatts of critical IT load. To put that in perspective, a typical US data center might operate between 10 to 50 MW. So we’re talking about an AI-focused mega-facility here.
This level of power supports tens of thousands of GPU chips running simultaneously. Such capacity is essential to handle the massive computational tasks of training AI models or running real-time inference at scale.
Practical Takeaways for Investors and AI Enthusiasts
- Applied Digital investors: The lease deal provides predictable, long-term revenue—with an annual price escalator—boosting confidence in future cash flows. Seeing the stock ripple almost 50% upward hints at growing market trust.
- CoreWeave fans: The company’s strategic partnership gives it scale and steadiness. With shares already up over 230% since March, more upside looks feasible as AI adoption accelerates.
- AI infrastructure watchers: This is a clear sign of capital flowing into AI compute power. It suggests growing demand for specialized data centers optimized for AI workloads, beyond traditional cloud providers.
- Tech strategists: Applied Digital’s foresight in securing long-term lease agreements protects against cost inflation and positions the company well amid a booming AI market.
What’s Next in This AI Data Center Saga?
The Applied Digital-CoreWeave lease is a strong indicator of where AI infrastructure is headed: large-scale, specialized, and contracted with stability in mind. As AI models grow in size and complexity, the demand for data centers like Ellendale will skyrocket.
Could we see even more aggressive expansion from Applied Digital or new partners coming on board? Quite possibly. And market reactions suggest investors are keenly watching those developments.
Interesting to think about: How will this influence other data center operators? Will we witness a race to secure long-term AI compute deals, or will new players innovate alternative business models? Applied Digital’s bold move might set the tone.
Final Thoughts: A Win for AI, Investors, and Innovation
Applied Digital’s $7 billion lease agreement with CoreWeave pushes the company into a new era of AI infrastructure dominance. The massive share price surge isn’t just hype—it’s a market acknowledging tangible, long-term value creation.
CoreWeave benefits too, buoyed by Nvidia technology and strong demand for AI server rentals. Together, they’re building critical foundations for the AI revolution.
Next time you hear about “AI compute power” or “data center expansion,” remember Applied Digital’s Ellendale campus—where teraflops turn into actionable AI breakthroughs, and investors have a front-row seat.
What caused Applied Digital shares to rise 48%?
Shares jumped after Applied Digital signed two long-term lease agreements with CoreWeave for AI data centers. The deal promises $7 billion in rental revenue over about 15 years.
How significant is the $7 billion lease agreement for Applied Digital?
This deal marks a major strategic expansion, locking in a long-term revenue stream. It includes an upfront pricing model with annual escalators regardless of project costs.
What role will CoreWeave play in Applied Digital’s data center operations?
CoreWeave will supply AI and high-performance computing infrastructure for Applied Digital’s Ellendale, North Dakota campus, boosting its AI compute capacity.
What is the capacity and power load involved in the lease agreement?
The lease covers 250 megawatts of IT load across two data cell blocks, with an option for a third block. The entire campus can host up to 400 MW of load.
