Shares of Applied Digital Corporation surged 25.5% during Friday's trading session, closing at $34.95, before a slight retreat in after-hours activity. The move comes as technology and semiconductor stocks broadly rebounded, with the Philadelphia Semiconductor Index climbing 5.7% after a recent sell-off.
AI Demand Fuels Growth
The company is viewed as a key player in the expanding artificial intelligence infrastructure landscape. Major technology firms are projected to spend over $630 billion this year, with a significant portion dedicated to AI, driving intense demand for data center capacity.
Financial and Operational Milestones
In its fiscal second quarter, Applied Digital reported revenue of $126.6 million, a 250% year-over-year increase. The firm has secured leases for 600 megawatts of data center capacity across two North Dakota campuses, with potential lease revenue estimated near $16 billion. Additionally, construction began in January on a new 430-megawatt campus in the southern United States, targeting initial operations for mid-2027.
Financing and Market Sentiment
Financing remains a focus, with the company detailing a $100 million senior secured promissory note carrying an 8% interest rate, paid in kind. Market sentiment toward heavy capital expenditure in tech has been mixed, as evidenced by recent investor reactions to large spending forecasts from other industry giants. Traders are now monitoring for further lease agreements or funding developments, with broader market direction potentially influenced by upcoming economic data.