Applied Digital's stock jumped by 48% after the company announced it has secured two major, long-term agreements with CoreWeave. These deals involve Applied Digital leasing out its data center facilities for artificial intelligence (AI) computing.
Applied Digital anticipates earning a significant $7 billion in rental income over the approximately 15-year duration of these leases. The pricing is fixed from the start, with an automatic annual increase, regardless of the actual costs of the projects.
Applied Digital's CEO, Wes Cummins, stated that these new long-term leases with CoreWeave represent a key step in their plan to grow their presence in advanced computing infrastructure.
Under the agreement, CoreWeave will utilize Applied Digital's data center campus in Ellendale, North Dakota, to provide AI and high-performance computing services. Applied Digital will supply 250 megawatts of power capacity for CoreWeave's IT needs, with the Ellendale campus itself designed to handle a total of 400 megawatts.
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