Why Applied Digital Stock Was a Major Winner on Wednesday
It's teaming up with a peer to develop an AI data center in Texas.
Applied Digital (APLD) experienced a significant surge in its stock price on Wednesday, rising almost 9% to nearly $35 per share by the end of the trading session. This gain was largely driven by a new development contract the company signed with a peer, Soluna Holdings (SLNH), which was announced prior to the market opening. Under this joint venture agreement, Applied holds a 51% stake while Soluna owns the remaining 49%.
The joint venture aims to construct a 50-megawatt, next-generation data center near Soluna's Dorothy 3 development site in Texas, powered by a nearby wind farm. This project, subject to certain conditions and approvals, including a county tax abatement, is expected to be completed by the end of the year. Soluna has also assigned ChronoScale Holdings, an AI data center platform majority-owned by Applied, a non-binding letter of intent to lease the facility.
This move further solidifies Applied's position in the competitive AI data center industry, distinguishing it from other players, including those previously involved in the cryptocurrency space. Analyst Roth/MKM's Bryan Baratian has reiterated his bullish stance on Applied, recommending the stock as a buy with a price target of $35, representing a 67% increase from its latest closing price.
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