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June 3 - Applied Digital (NASDAQ:APLD) shares surged about 48% Monday after the company signed two long-term lease agreements with CoreWeave (NASDAQ:CRWV) for artificial intelligence data centers.
CoreWeave, backed by Nvidia (NASDAQ:NVDA), saw its stock climb about 8% following the announcement.
Under the deals, Applied Digital expects roughly $7 billion in rental revenue over an approximately 15-year term, with lease payments set upfront and an annual escalator regardless of project costs.
Chief Executive Wes Cummins said the agreements advance the company's strategic push into advanced compute infrastructure.
CoreWeave will deploy AI and high-performance computing hardware at Applied Digital's new data center campus in Ellendale, North Dakota.
Applied Digital will supply 250 megawatts of critical IT load, and the campus is designed for up to 400 MW.
The leases cover two data cell blocks, a 100 MW block and a 150 MW block, with CoreWeave holding an option for a third 150 MW block.
CoreWeave shares reached a record high of $130.76 on May 29 and began trading at $39 on March 28.
This article first appeared on GuruFocus.