Applied Digital stock soars 76% after Nvidia participates in $160M financing for data center firm

• Applied Digital raised $160 million on Thursday, with Nvidia participating in the funding.

• Applied Digital builds and operates state-of-the-art data centers that handle accelerated computing.

• Shares surged as much as 76% on Thursday after news of the fresh investment.

Applied Digital is the latest AI stock to draw attention from Wall Street, after raising $160 million on Thursday from high-profile backers, including chip titan Nvidia.

Shares of the data center operator surged as much as 76% on Thursday. It pared that gain to about 61 percent at 3:30 a.m., with shares trading at $5.26.

The private financing deal was priced at $3.24 per share, with 49.4 million shares issued to a group of institutional and accredited investors, including Nvidia.

“This strategic funding underscores Applied Digital’s position as a trusted pioneer in the accelerated computing space,” the company said in a press release.

Part of the $160 million raised will help finance the construction of one of the world’s largest data centers, the company said, as well as the development of an additional 300 megawatts of data center capacity.

Applied Digital builds, operates and leases state-of-the-art data centers that address compute-accelerated workloads using popular GPU chips from Nvidia.

“We’ve done a lot with Nvidia, and I think we’re unique in that we have both the cloud aspect and the data center build. I think both are important to them,” Applied Digital CEO Wes Cummins told The Wall Street Journal.

Applied Digital said it is a “preferred Nvidia Cloud partner.”

“We are proud of our strong relationship with NVIDIA,” said Cummins.

It’s not the first time an investment from Nvidia has sparked a frenzy in another company’s stock price.

In February, Nvidia revealed relatively small investments in SoundHound AI and Nano X Imaging, resulting in equally large movements.

And in July, Nvidia revealed its investment in Serve Robotics, which led to a 241% increase in its share price.

Despite Thursday’s big run in Applied Digital stock, it’s still down 18% year to date.

Taking into account its Thursday increase, Applied Digital trades at a market valuation of about $900 million.

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