What Happened?
Shares of digital infrastructure provider Applied Digital (NASDAQ:APLD) jumped 6.6% in the morning session after a broader rally in artificial intelligence (AI) related stocks and positive company-specific developments lifted sentiment.
The positive sentiment for the company followed its successful pivot from cryptocurrency mining to designing and operating specialized data centers for AI. Adding to the tailwind, the entire tech sector received a boost after a major chip deal between AMD and OpenAI was announced, which fueled enthusiasm for AI-related companies.
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What Is The Market Telling Us
Applied Digital’s shares are extremely volatile and have had 94 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 6.8% as sentiment in the tech space improved, fueled by significant developments from OpenAI.
OpenAI's valuation reportedly soared to $500 billion after a share sale, making it the world's most valuable startup and reinforcing investor confidence in the AI boom. Further fueling the rally, OpenAI announced partnerships with South Korean chipmakers SK Hynix and Samsung for its ambitious 'Stargate' project, a massive undertaking aimed at building AI infrastructure.
This news created a positive ripple effect across the tech landscape, particularly for semiconductor companies, as it signals sustained, large-scale investment in the hardware that powers AI. The developments have bolstered the entire sector, pushing technology stocks to new records.
Applied Digital is up 260% since the beginning of the year, and at $28.06 per share, has set a new 52-week high. Investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $311,781.
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