Today's significant surge in Applied Digital's share price is attracting attention.
Today's significant surge in Applied Digital's share price is attracting attention.
Applied Digital's stock is soaring in today's trading, seeing a 9.4% increase as of 11:30 a.m. ET, and reaching as high as 25.1% earlier in the day. This surge is largely due to two major factors: an investment deal and positive news from the Bureau of Labor Statistics.
Celebrating their latest win, Applied Digital announced an agreement for up to $5 billion in funding from Macquarie. Macquarie, through multiple funds, will invest up to $900 million in one of Applied Digital's high-performance computing (HPC) data centers. In return, Macquarie will receive a perpetual preferred and 15% common equity interest in Applied Digital's HPC business segment, with the company retaining the remaining 85%. This agreement paves the way for Macquarie to potentially invest an additional $4.1 billion in future HPC data center projects.
In addition to this, the BLS's latest Producer Price Index (PPI) report, which showed a 0.2% annual increase, significantly lower than the expected 0.4%, has also boosted Applied Digital's stock. The lower-than-expected inflation rate has helped allay investor concerns and fueled optimism for growth stocks.
Following today's trading, Applied Digital is scheduled to publish Q2 2025 earnings results. Analysts expect a loss of $0.14 per share on revenue of $61.6 million, with projected revenue growth of 46% year over year. The stock's performance in the coming trading day will hinge on how these actual results compare to analyst forecasts.
Overall, Applied Digital has demonstrated strong sales momentum in conjunction with demand for artificial intelligence computing and has been a major benefactor of significant investments from organizations such as Nvidia and Macquarie. Revenues have grown at an average rate of 92.9% per year, outpacing the IT industry's growth rate, while earnings have seen a steady decrease each year. Despite these historical financial trends, the company's latest partnerships and positive market indicators suggest a promising future.
In light of the investment deal, Applied Digital has secured up to $5 billion in funding from Macquarie, with Macquarie committing to invest up to $900 million in return for a preferred and equity interest in the HPC business segment. This influx of finance will likely aid in future investing opportunities in HPC data center projects.
The positive news from the Bureau of Labor Statistics, specifically the lower-than-expected Producer Price Index (PPI) report, has also contributed to the surge in Applied Digital's stock, as it has allayed investor concerns and fueled optimism for growth stocks like Applied Digital.