Applied Digital stock soars 50% after raising $160m from Nvidia, other investors - WSJ

Data center operator Applied Digital (APLD) raised $160 million in a funding round, the Wall Street Journal reported Thursday. The company’s CEO Wes Cummins revealed that Nvidia (NASDAQ:NVDA ) and real estate firm Related Companies are among the participating investors.

The capital infusion will come from a new share offering by the Nasdaq-listed firm, which had a market valuation exceeding $500 million as of Wednesday's close.

Applied Digital’s shares rocketed more than 50% in Thursday premarket trading.

The company specializes in constructing and leasing data center space, and has recently launched an AI cloud-computing business powered by Nvidia’s chips.

“We have been doing a lot with Nvidia, and I think we’re unique in that we have both the cloud aspect and the data center build-out,” Cummins said. “I think both are important to them.”

Cummins noted that the funds raised will support the company's expansion and facilitate planned debt-financing initiatives. Applied Digital is seeking debt financing for a major data center project in North Dakota, along with plans to grow its AI cloud-computing operations.

Nvidia has been ramping up its investments as the AI sector continues to thrive, backing companies that use its technology while gaining insight into the latest advancements in AI. The company tripled its investment activity last year compared to the previous year.

Several companies in the AI cloud-computing space, such as CoreWeave, have attracted investments from Nvidia. CoreWeave, for instance, reached a valuation of $19 billion during a funding round earlier this year.

In another recent deal, Nvidia participated in a $100 million funding round for Sakana AI, a Japanese AI research firm.

As part of the Applied Digital agreement, the company will issue approximately 49 million shares of its common stock at $3.24 per share, which was its closing price on Tuesday.

Source: Investing.com