Applied Digital Surges 14% on $150M Equity Facility to Expand AI Data Center Infrastructure

Key Highlights:

• APLD stock jumps nearly 14% following financing news
• $150 million convertible preferred equity facility to fund Ellendale HPC Campus
• Flexible structure gives Applied Digital control without immediate dilution

Applied Digital Corporation (Nasdaq: APLD) soared nearly 14% on Thursday after announcing a strategic $150 million convertible preferred equity facility, aimed at accelerating development of its Ellendale High-Performance Computing (HPC) Campus. The move underscores the company’s ongoing pivot from crypto-focused infrastructure to a broader role in AI and enterprise compute.

Shares of APLD climbed to $5.17, up from a prior close of $4.54, as investors cheered the non-dilutive and highly flexible nature of the financing. The facility allows Applied Digital to draw capital at its discretion in $25 million increments, over a 36-month term, with no penalties or minimum usage commitments—an uncommon advantage for a growth-stage company operating in a capital-intensive industry.

“This facility gives us flexibility to access capital that will be used to progress the build-out of our second data center while nearing completion on our first,” said Wes Cummins, CEO of Applied Digital.

Under the agreement, preferred shares will carry no dividends or preferred return and will be sold at a 4% original issue discount. They can be converted into common stock at a price no lower than $4.25 per share, with standard limitations in place to prevent undue dilution and comply with Nasdaq listing rules, including a 19.99% blocker and 4.99% beneficial ownership cap.

Building the Backbone of AI

The financing aligns with Applied Digital’s aggressive push into AI infrastructure, an area increasingly viewed as a secular growth opportunity. The Ellendale Campus, a multi-building facility designed specifically for AI and machine learning workloads, represents a critical step in Applied’s evolution beyond its blockchain origins.

The company, which has grown revenue over 53% year-over-year, has emerged as a niche player in high-density, power-rich data center design—an area in high demand as enterprises, cloud providers, and research organizations seek specialized environments to support GPU-heavy tasks.

Although Applied Digital still faces skepticism due to its historically negative earnings per share and prior reliance on the volatile crypto market, its ongoing transformation into a vertically integrated AI infrastructure provider has begun attracting a different breed of investor—those betting on the digital industrial revolution.

Market Reaction and Outlook

Trading volume spiked to over 39 million shares, far above the average daily volume of 30 million, reflecting strong investor interest. Applied Digital now boasts a market capitalization of approximately $1.14 billion.

The facility also provides critical breathing room: with a high beta of 5.02 and history of cash burn, APLD now has greater control over funding decisions without rushing into dilutive capital raises at unfavorable terms.

While challenges remain—including no current dividend, ongoing losses, and questions around scale execution—the latest development signals Applied Digital’s firm commitment to playing a long-term role in the digital infrastructure needed to support global AI ambitions.