Applied Digital Stock Gains After Macquarie Invests $5 Billion

Applied Digital Corporation APLD stock traded higher by more than 20% at the start of Tuesday’s session.

The company entered into a $5 billion perpetual preferred equity financing facility with Macquarie Asset Management (MAM).

This deal is aimed at supporting Applied Digital’s high-performance computing (HPC) business.

Under the development, MAM will invest up to $900 million, supporting the 400 MW build-out of the Ellendale HPC Campus. The financing structure includes the issuance of perpetual preferred equity units and common equity units, with MAM investing $2.25 million per executed lease for each 1 MW of capacity.

Proceeds from the deal will help complete the Ellendale, North Dakota-based campus build-out. They will also help repay approximately $180 million in bridge debt and recover over $300 million of equity investment.

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Additionally, MAM holds a right of first refusal for future HPC data center project funding, potentially adding up to $4.1 billion over the next 30 months.

The preferred equity carries a 12.75% annual dividend rate, and increases by 87.5 basis points after five and six years.

According to Benzinga Pro, APLD stock has gained over 40% in the past year. Investors can gain exposure to the stock via VanEck Digital Transformation ETF DAPP.

The common equity represents 15% of APLDH’s fully diluted common equity at issuance. The facility is contingent upon executing a lease with a hyperscaler for the 100 MW Ellendale HPC data center and meeting customary closing conditions.

Applied Digital CEO Wes Cummins highlighted the partnership’s potential for significant growth.

“We are excited to have MAM’s support as we establish ourselves as a leader in the Tier 3 data center infrastructure sector, while continuing to develop and operate large-scale, state of the art data centers for world-class customers at the forefront of the AI revolution,” Cummins said.

Applied Digital said it aims to capitalize on this demand with technologies and data center solutions, including GPU cloud services and liquid-cooling infrastructure tailored for AI and machine learning workloads.

Price Action: Applied Digital stocks are trading higher by 21.7% to $9.453 premarket at last check Tuesday.

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