AI Arms Race Sends Applied Digital Soaring 25% on $11B CoreWeave Deal

Applied Digital APLD delivered a stunning first-quarter performance that caught Wall Street's attention, as revenue surged 84% year-over-year to $64.2 millionwell above analyst expectations of $50 million. The company's smaller-than-expected adjusted loss of 3 cents per share underscored improving operational leverage as it rides the generative AI wave. Shares of Applied Digital jumped 25% in premarket trading Friday, as investors began to price in the firm's growing role as a critical enabler of high-performance AI computing infrastructure.

Management's strategic expansion continues to hinge on its deep partnership with CoreWeave CRWV. In August, Applied Digital finalized an additional 150MW lease in North Dakota, pushing its total anticipated contracted lease revenue to around $11 billion, including $7 billion from two earlier 15-year deals signed this year. The company's data center hosting segment generated $37.9 million during the June-to-August period, highlighting accelerating enterprise demand for large-scale compute capacity.

Roth Capital recently noted that Applied Digital could potentially secure another high-performance computing colocation agreement before year-end, a move that would reinforce its growing dominance in the AI infrastructure space. Despite a 144% increase in cost of revenues to $55.6 milliondriven largely by facility buildoutsthe company appears well positioned to capture the next leg of AI-driven data demand. Investors now view Applied Digital not just as a hosting provider, but as a core infrastructure player in the global AI buildout cycle.