Applied Digital’s $7B AI Lease Deal Sparks 48% Stock Surge
Explore how Applied Digital’s landmark $7 billion AI lease with Nvidia-backed CoreWeave reshapes data center infrastructure and ignites investor enthusiasm in the booming AI cloud market.
Key Takeaways
- Applied Digital’s $7B lease spans 15 years with CoreWeave
- Lease covers 250MW critical IT load with options for expansion
- CoreWeave’s Nvidia-powered AI servers drive demand
- Applied Digital’s shares jumped 48% on announcement
- Partnership cements Applied Digital’s AI infrastructure role
When Applied Digital announced a $7 billion lease agreement with Nvidia-backed CoreWeave, the market took notice—shares soared 48%, signaling investor excitement about AI’s infrastructure boom. This isn’t just another lease; it’s a strategic leap into the heart of artificial intelligence and high-performance computing. Applied Digital will provide 250 megawatts of critical IT load at its Ellendale, North Dakota campus, with options to expand further. CoreWeave, a rising star renting Nvidia-powered AI servers, will operate across multiple data center blocks, fueling the next generation of AI cloud services. In this article, we unpack the deal’s details, its market impact, and what it means for investors navigating the fast-evolving AI infrastructure landscape.
Unpacking the $7B Lease
Imagine a deal so big it sends shares rocketing nearly 50%. That’s exactly what happened when Applied Digital inked two long-term leases with CoreWeave, totaling around $7 billion over 15 years. This isn’t your average rental agreement; it’s a carefully crafted pact where Applied Digital commits to providing 250 megawatts of critical IT load at its Ellendale, North Dakota data center campus. To put that in perspective, 250MW is enough power to run thousands of high-performance servers humming day and night. CoreWeave also holds an option to lease an additional 150MW, hinting at future growth. The lease includes an annual escalator—a built-in rent increase that keeps pace regardless of project costs—ensuring Applied Digital’s revenue stream stays robust. This deal is a masterstroke in securing long-term, predictable income while riding the AI wave.
CoreWeave’s AI Infrastructure Role
CoreWeave isn’t just any tenant; it’s a cloud-computing startup backed by Nvidia, renting AI servers powered by Nvidia’s sought-after GPUs. These GPU clusters are the engines behind AI’s rapid advances, handling complex computations that traditional CPUs can’t match. By leasing space at Applied Digital’s Ellendale campus, CoreWeave scales its infrastructure without the heavy upfront costs of building data centers. The first 100MW data center is expected to be operational by late 2025, with a 150MW expansion following in mid-2026, and a potential third 150MW building planned for 2027. This phased approach matches the explosive demand for AI cloud services, positioning CoreWeave as a key player in the so-called neocloud market—specialized cloud providers renting Nvidia chips to developers. The partnership is a win-win: CoreWeave gains capacity, Applied Digital secures long-term tenants.
Investor Reaction and Market Impact
The stock market’s response was swift and emphatic. Applied Digital’s shares surged 48% on June 2, 2025, reflecting investor enthusiasm for the company’s strategic expansion into AI infrastructure. CoreWeave’s shares also climbed about 8%, signaling positive sentiment around the partnership and the broader AI data center market. Applied Digital’s market capitalization reached approximately $2.26 billion, with trading volumes and volatility spiking—classic signs of a growth story capturing Wall Street’s imagination. This deal reduces financial risks by locking in rental revenue upfront, including annual escalators, which smooths earnings visibility. Investors now watch closely for Applied Digital’s upcoming earnings report in July 2025, eager to see how the company executes its ambitious expansion plans and capitalizes on AI’s surging demand.
Strategic Expansion into AI Infrastructure
Applied Digital CEO Wes Cummins framed the lease agreements as a pivotal step in the company’s evolution. By securing long-term leases with CoreWeave, Applied Digital cements its role as a critical infrastructure provider for next-generation AI and high-performance computing. The Ellendale campus, designed to host up to 400 megawatts of critical IT load, is a physical manifestation of this vision. Beyond the immediate lease, the campus has over 1 gigawatt of power capacity in various stages of study, signaling potential for future growth. This strategic positioning taps into the skyrocketing demand from AI hyperscalers and enterprise customers seeking GPU-supported cloud services. It’s a savvy move that aligns Applied Digital’s real estate assets with the technology trends shaping the future.
The Broader AI Data Center Landscape
This partnership between Applied Digital and CoreWeave highlights a broader industry shift: the rising importance of AI data centers as the backbone of modern computing. CoreWeave’s model—renting Nvidia-powered AI servers to developers—reflects a new era where specialized cloud providers dominate. For Applied Digital, the deal offers a way to monetize its data center real estate without the capital-intensive burden of owning and operating the servers themselves. This separation of infrastructure ownership and cloud service provision is reshaping the market. As AI workloads grow exponentially, data center operators like Applied Digital become indispensable, providing the power and space needed to fuel innovation. The Ellendale campus stands as a beacon of this transformation, ready to meet the surging demand for AI compute power.
Long Story Short
Applied Digital’s $7 billion, 15-year lease with CoreWeave is more than a headline—it’s a game changer in AI data center real estate. The deal locks in a predictable revenue stream while positioning Applied Digital at the forefront of AI and high-performance computing infrastructure. Investors rewarded this vision with a 48% stock surge, reflecting confidence in the company’s strategic pivot toward the neocloud market. CoreWeave’s rapid growth, powered by Nvidia GPUs, underscores the insatiable demand for specialized AI cloud services. For investors and industry watchers alike, this partnership highlights the critical role of data center operators in powering tomorrow’s technology. As the Ellendale campus expands toward 400 megawatts and beyond, Applied Digital’s story is a vivid reminder that infrastructure is the backbone of innovation—and opportunity.