Digi Power X Inc. experienced a sharp decline in its stock price on Thursday, falling approximately 14% to $7.28 in heavy trading volume, as investors adopted a cautious stance ahead of the company's first-quarter earnings release scheduled for Friday morning. The stock, which traded on the Nasdaq, saw volume surge past 34 million shares, reflecting heightened market attention on the AI infrastructure firm's upcoming financial results and operational update.
The earnings call, set for 8:30 a.m. ET on May 15, comes at a pivotal moment for Digi Power X, which has recently announced several high-profile deals aimed at capitalizing on the growing demand for AI computing power. The company's $1.1 billion, 10-year master services agreement with Cerebras Systems to build a 40-megawatt AI data-center campus in Columbiana, Alabama, is a centerpiece of its growth strategy. The project is divided into two phases: an initial 15-megawatt segment followed by a 25-megawatt expansion, with the potential to reach $2.5 billion if renewal options are exercised.
In addition to the Cerebras deal, Digi Power X is set to launch a $19.6 million SubQ AI GPU rental contract on Friday, spanning 24 months. This agreement guarantees dedicated Nvidia Blackwell GPU access via the company's NeoCloudz GPU-as-a-Service platform, marking a shift from infrastructure development to revenue generation. The company disclosed an upfront payment of approximately $2.95 million, representing 15% of the total contract value.
Digi Power X has also expanded its financing options, boosting its at-the-market equity program to a maximum of $175 million, as per a May 8 SEC filing. Of this, $75 million was part of an earlier plan, and by the filing date, $72.36 million in shares had already been sold. The company stated that proceeds may be used for operations, working capital, building Tier 3 data-center facilities, debt repayment, or acquisitions.
The market's reaction to Digi Power X stands in contrast to the enthusiasm surrounding Cerebras Systems, which made a strong debut on Thursday. Cerebras shares began trading at $350, soaring 89% above their $185 IPO price, after the chipmaker raised $5.55 billion. Prediction markets on Polymarket reflected strong AI enthusiasm for Cerebras, with a 53% chance of a first-day market cap between $60 billion and $70 billion, but Digi Power X did not register similar sentiment.
The AI infrastructure sector remains highly competitive, with significant capital requirements. Applied Digital recently secured a $7.5 billion, 15-year AI data-center lease with an unnamed U.S. hyperscaler, while Nebius broke ground on a gigawatt-scale AI factory campus in Missouri. Digi Power X, with its owned-power, owned-site strategy, aims to carve out a niche despite its smaller scale.
Investors will be closely watching Friday's earnings call for clarity on several key issues: the funding status of the Cerebras buildout, the timing of revenue recognition from the SubQ contract, and the company's ability to manage its share-sale program without diluting existing shareholders. Execution risks remain, including potential funding gaps, construction delays, and the sustainability of AI computing demand.
Digi Power X's chairman and CEO, Michel Amar, described the Cerebras deal as 'transformational,' while Hans Vestberg, senior adviser and former Verizon CEO, highlighted high-density AI infrastructure as a defining challenge of the current generation. The company's ability to deliver on these promises will be critical in determining its stock performance going forward.