Key Takeaways

• Applied Digital shares popped after the company agreed to lease data center space to CoreWeave.

• Both companies are backed by Nvidia, the chipmaking giant most associated with the rise of artificial intelligence.

• Shares of CoreWeave also climbed Monday.

Shares of Applied Digital (APLD) rose nearly 50% Monday after announcing a deal to lease data center space to AI darling CoreWeave (CRWV).

Applied Digital inked a pair of 15-year deals to host CoreWeave AI infrastructure at its Ellendale, N.D., campus. The deal is expected to generate $7 billion in total revenue over the decade-and-a-half span; the company reported about $53 million in revenue in its most recently completed quarter.

Both Applied Digital and CoreWeave are backed by Nvidia (NVDA), the second-most valuable company in the world and the chipmaking giant most associated with the rise of artificial intelligence. Nvidia held roughly 7.7 million shares of Applied Digital and 24.2 million shares of CoreWeave as of March 31, according to a regulatory filing.

CoreWeave provides its clients with access to data centers, which are used to develop artificial intelligence models. The company’s data centers are equipped with Nvidia chips.

Shares of CoreWeave rose about 8% on Monday.

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