Applied Digital stock jumps after Nvidia backs $160M funding round

Shares of Applied Digital (NASDAQ:APLD) jumped over 50% premarket on Thursday after disclosure that AI chip giant Nvidia (NASDAQ:NVDA) is joining other investors in a $160M financing round for the company.

Through a private placement, Applied Digital (APLD) agreed to issue 49,382,720 shares of its common stock at a price per share of $3.24, representing the last closing price on September 4, 2024.

Investors in the deal include Nvidia (NVDA) and real-estate firm Related Companies.

The deal brings fresh capital for Applied Digital (APLD) and is expected to help fund growth at the company and underpin planned debt-financing deals.

The data-center and AI cloud firm, which had a market value of more than $500M as of Wednesday’s close, is seeking debt financing for a major data-center project in North Dakota, as well as to expand its cloud-computing business, the WSJ reported.

Applied Digital (APLD) already serves as a Preferred NVIDIA Cloud Partner. “We have been doing a lot with Nvidia, and I think we’re unique in that we have both the cloud aspect and the data center build-out,” Applied Digital chief executive Wes Cummins told WSJ. “I think both are important to them.”

Nvidia (NVDA) has been ramping up its investment activity amid the AI boom, backing companies that use its chips. The company most recently participated in a $100M financing round for Japanese AI research company, Sakana AI.