Why Marathon Digital And Applied Digital Stocks Are Up

Marathon Digital Holdings, Inc. MARA and Applied Digital Corporation APLD shares are trading higher Friday after the companies announced Marathon Digital has entered into a definitive purchase agreement to acquire Applied Digital's Bitcoin mining data center.

The Details:

Marathon Digital will purchase the bitcoin mining data center in Garden City, Texas, with a name plate capacity of 200 megawatts, for $87.3 million in cash. The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2024.

“After taking over ownership and operational control of the data centers we recently acquired in Granbury, Texas and Kearney Nebraska, we are building on that momentum by now acquiring the Bitcoin mining data center in Garden City, Texas from Applied Digital,” said Fred Thiel, Marathon’s CEO.

“This transaction increases our influence over our current operations, reduces our cost per coin by approximately 20% at the site, and provides us with an additional 100 megawatts of capacity in which to expand," Thiel added. 

“This strategic transaction represents a purposeful pivot, equipping the Company to allocate financial and operational resources toward strategic sites in North Dakota, as well as bolstering our Balance Sheet strength. With a focused emphasis on the building of our HPC data centers, we reinforce our groundwork for enduring growth and operational excellence,” said Wes Cummins, CEO of Applied Digital.

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MARA Stock Forecast 2030:

Predicting the future in stock prices over long periods of time is challenging. Wall Street analysts use complex models that take into account interest rates, economic growth, competitive advantages, management teams and historical profitability, among a host of other factors.

If, as an investor, you want to assume most of the major factors remain stable, you can use trend analysis as a helpful tool. Using a longer term trend line or historical performance of the stock, you can aim to forecast a stock's annual rate of return.

For Marathon Digital Holdings, over the past 5 years, it's annualized stock performance is 49.03%, and if you assume that trend continues for another 5 years, you can expect a stock to trade at $138.06.

Using a trend line (see how to perform this function here), If you choose to use a trend line, connect your two points and look into the future to the point in time in which you're curious. Once you've identified that stock price, you may want to consider what type of conditions would need to exist for the stock to justify the share price – be it an outside influence or managerial decision making.

MARA, APLD Price Action: According to Benzinga Pro, Marathon Digital shares are up 2.44% at $18.68, and Applied Digital shares are up 8.5% at $4.59 at the time of publication.

Image: Wilfried Pohnke from Pixabay