Applied Digital Stock Surges 28% on Breakthrough AI Chip Deal
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
applied-digitalai-stocks
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Applied Digital Corporation stock surged 28% in afternoon trading on June 12, 2026, reaching an intraday high of $15.75. The sharp move followed an announcement of a strategic multi-year agreement with a leading artificial intelligence company to supply high-performance computing infrastructure. Trading volume ballooned to 45 million shares, more than five times the 90-day average, indicating intense institutional interest.
The rally marks a significant rebound for Applied Digital, whose shares had declined approximately 40% year-to-date prior to the announcement. Investor sentiment toward specialized data center operators had soured in recent months amid concerns over capital expenditure cycles and energy costs. The last comparable single-day surge of this magnitude for the company occurred on August 8, 2025, when shares gained 32% on better-than-expected earnings.
The current macro backdrop is characterized by intense competition for advanced Graphics Processing Units. Nvidia's latest architecture commands waiting lists extending several quarters, creating a scarcity premium for operators with secured supply and operational data centers. The 10-year Treasury yield sits at 4.2%, making funding for expansion capital-intensive but accessible for firms with contracted revenue.
The catalyst is a binding agreement with an undisclosed, well-funded AI lab. The deal involves dedicating a significant portion of Applied Digital's next-generation data center capacity to training large language models. This transforms the company's revenue profile from a generalized cloud provider to a strategic partner in the AI supply chain, de-risking future cash flows.
The stock's 28% gain translates to a market capitalization increase of approximately $350 million. Applied Digital's year-to-date performance swung from -40% to -22% in a single session. By comparison, the broader SPDR S&P 500 ETF Trust is up 8% for the year, while the Global X Data Center REITs & Digital Infrastructure ETF is down 5%.
A comparison of key metrics before and after the announcement illustrates the shift.
| Metric | Pre-Announcement (June 11 Close) | Post-Announcement (June 12 Intraday) | Change |
|---|---|---|---|
| Share Price | $12.30 | $15.75 | +28.0% |
| 30-Day Avg. Volume | 8.5M | 45.0M | +429% |
| Market Cap | ~$1.25B | ~$1.60B | +$350M |
The deal's financial terms were not fully disclosed, but industry analysts estimate its total contract value could exceed $500 million over three years. This would represent a substantial increase over the company's trailing twelve-month revenue of $180 million. Short interest stood at 15% of float before the announcement, potentially fueling the rally through short covering.
The agreement validates the business model of specialized AI infrastructure providers. Peers in the digital infrastructure sector also saw positive momentum. Equinix Inc. shares rose 2.5%, and Digital Realty Trust gained 1.8% on the session as investors reassessed the value of data center assets.
A key beneficiary is Nvidia, as the deal implicitly confirms sustained demand for its high-end AI chips. Applied Digital's infrastructure is built around Nvidia's H100 and next-generation B200 GPUs. The news may also positively impact power and cooling technology suppliers like Vertiv Holdings Co, which provides critical infrastructure for high-density computing.
A counter-argument is execution risk. Building and commissioning the required data halls on schedule, amid global supply chain constraints for switchgear and transformers, presents a significant challenge. Any delays could diminish the deal's near-term financial impact. Options flow data shows heavy buying of short-dated call options, indicating speculative retail and institutional positioning for further upside.
Investors will scrutinize Applied Digital's next earnings call, scheduled for July 30, 2026, for specific financial details of the AI contract. Management's commentary on capital expenditure plans and projected margins will be critical for sustaining the positive momentum.
Key technical levels to monitor include immediate resistance near the 200-day moving average at $16.20. A decisive break above this level could target the $18.50 region. Support is now established at the $14.00 level, which was former resistance.
The next major industry catalyst is Nvidia's GTC conference in September 2026, where updates on GPU roadmaps could further influence the valuation of Applied Digital's contracted capacity. Any guidance revision from Applied Digital before the July earnings report would be a significant market-moving event.
The agreement signals that large AI labs are securing long-term compute capacity, a bullish indicator for the entire digital infrastructure sector. Companies with existing GPU clusters and available power capacity, such as CoreWeave and Lambda Labs, may see increased investor interest and potential deal flow. This trend could lead to consolidation as larger players seek to acquire ready-made capacity, potentially lifting valuations across the board. The deal's scale suggests a structural shortage of AI-grade data centers is intensifying.
The magnitude is comparable to the 35% single-day gain for SoundHound AI in February 2025 after announcing a partnership with a major cloud provider. However, Applied Digital's move is more significant due to its larger market capitalization and the binding nature of a multi-year contract versus a partnership announcement. The $350 million market cap increase is substantially larger than typical AI micro-cap rallies, indicating broader institutional participation and a re-rating based on tangible future revenue.
The primary risk is operational execution. Building out the required data center space involves navigating complex supply chains for power distribution units and cooling systems. A second risk is concentration; the company's financial health becomes heavily dependent on a single, albeit large, customer. Any technological shift that reduces demand for the specific GPU architectures in Applied Digital's fleet could also negatively impact the long-term value of the contract, a concept known as technological obsolescence risk.
Applied Digital's rally reflects a fundamental repricing based on a high-value contract that secures its role in the AI infrastructure ecosystem.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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