The American company Applied Digital reported on Sunday that it had signed two long-term lease agreements with CoreWeave, which are expected to generate $7 billion in total revenue over 15 years. The deal, announced before markets opened, sparked a historic surge in the company’s stock, which closed up 48% on the day and has risen 139% over the past year.

Applied Digital specializes in developing and operating high-performance data centers tailored for artificial intelligence workloads. In recent quarters, the company has shifted its business model to function more like a data center REIT (real estate investment trust) – focusing on leasing infrastructure and collecting long-term rental income rather than directly hosting computational services.

From Infrastructure Provider to Strategic Landlord
As part of this transformation, Applied Digital has signed multi-year contracts with CoreWeave, one of the fastest-growing AI cloud infrastructure companies in the U.S., which recently went public. The two agreements, spanning approximately 15 years, are expected to stabilize Applied Digital’s revenue stream and significantly strengthen its cash flow.

According to the company, the agreement includes leasing several data centers and infrastructure components to CoreWeave. The expected revenue from these agreements – totaling $7 billion – is considered by analysts to be one of the most significant strategic milestones for Applied Digital since its IPO.

Wall Street Reaction: Analysts Enthusiastic, Investors Bullish
The market response was immediate and dramatic. Shares of Applied Digital (ticker: APLD) jumped from $6.83 to $10.14 – a single-day gain of 48.46%. In pre-market trading the next morning, the stock continued to rise, briefly crossing $10.78. This upward momentum continues a trend that has seen the stock appreciate nearly 140% over the past 12 months.

Analysts on Wall Street welcomed the deal enthusiastically. The Needham investment bank noted that the agreement provides “immediate cash inflow and long-term visibility” and emphasized that all nine analysts covering the stock currently rate it as a “buy,” with no holds or sells – an unusual level of consensus in the sector.

High Beta, Negative EPS, and the Long-Term Picture
Despite the excitement, Applied Digital’s fundamentals still present a mixed picture. The company trades with a five-year beta of 5.87, indicating high volatility relative to the market. Its earnings per share (EPS) over the trailing twelve months stands at -$1.47, suggesting it is still unprofitable.

Nevertheless, the one-year target estimate for the stock is $12.50 – approximately 23% above its current trading level – indicating that the market sees further upside potential, assuming the company can effectively execute its long-term leasing strategy.

A New Reality in the AI Infrastructure Market
The Applied-CoreWeave agreement highlights broader trends in the artificial intelligence infrastructure space. As demand for high-performance data centers continues to soar – driven by generative AI, LLMs, and GPU clusters – companies like Applied Digital are positioning themselves as essential enablers rather than direct service providers.

For CoreWeave, the deal ensures access to critical data center capacity without tying up capital in real estate development. For Applied Digital, it marks a transition to a more predictable and asset-backed revenue model.

In Summary
While the fundamentals of Applied Digital still reflect a company in transition – with losses on the books and relatively high risk – the $7 billion deal with CoreWeave repositions the company as a serious player in the booming AI infrastructure sector. Investors have responded accordingly, sending the stock sharply higher and pushing it to the top of Wall Street’s trending tickers.

If the company succeeds in executing its vision and maintains leasing momentum with other partners, it could become a leading landlord in the new AI-driven data economy. For now, Wall Street is giving it the benefit of the doubt – and a bullish vote of confidence.