Applied Digital $7B Dream: APLD Stock 100% Rally Cut in Half as CoreWeave Backs Out
Applied Digital’s stock went on a rollercoaster ride, surging on news of a major cloud computing deal—only to give back nearly half of...
Quick overview
- Applied Digital's stock surged after announcing a multi-billion-dollar lease agreement with CoreWeave, only to drop nearly 23% following CoreWeave's unexpected exit from its equity position.
- The lease agreement, covering 250 megawatts of data center capacity, is projected to generate $7 billion in revenue over 15 years.
- Despite the stock's volatility, analysts suggest that the partnership remains intact and could still present a long-term investment opportunity.
- The situation raises questions about the nature of the partnership and whether the market's reaction is an overreaction or a sign of deeper issues.
Applied Digital’s stock went on a rollercoaster ride, surging on news of a major cloud computing deal—only to give back nearly half of those gains after a surprise divestment by its partner, CoreWeave.
Applied Digital Soars, Then Stumbles After CoreWeave Exit
Applied Digital Corporation (NASDAQ: APLD) took the tech world by storm last week after announcing a multi-billion-dollar, 15-year lease agreement with CoreWeave, an Nvidia-backed cloud infrastructure powerhouse. The agreement covered 250 megawatts of data center capacity at Applied’s facility in Ellendale, North Dakota, and was projected to generate a staggering $7 billion in total revenue over its lifespan.
APLD Chart Weekly – A Breakout Week Sparked by Strategic Deal
Investors rushed in, driving APLD shares to a weekly high of $15.40, more than doubling in value, before ending the week just under $14. Despite the pullback into the close, the move marked one of the most explosive rallies in the tech infrastructure space for the week.
CoreWeave Sells Out: APLD Shares Tumble 23%
However, the excitement didn’t last. The rally hit a sharp reversal after an unexpected Schedule 13G filing revealed that CoreWeave had completely exited its equity position in Applied Digital. The document, filed on June 10, showed 0.0% beneficial ownership, meaning CoreWeave had fully liquidated its stake despite the lease agreements announced just days earlier.
This surprise move sent shockwaves through the market, leading to a sharp 23% drop in APLD shares this week, with the stock slipping to lows around $11.
Partnership Still in Place – But Questions Remain
While the lease contracts remain active, CoreWeave’s decision to sell its equity stake has sparked speculation around the nature of the partnership. Analysts noted that such relationships between hyperscale tenants and data center operators can be complex, and that ownership changes don’t necessarily imply operational retreat.
Some believe the pullback could create a compelling entry point for longer-term investors, especially once short-term volatility fades and clarity around the business relationship improves.
Strategic Reset or Market Overreaction?
Despite this week’s sharp retracement, the broader takeaway is that Applied Digital has managed to position itself as a critical player in next-gen cloud infrastructure. The $7 billion deal itself is still in place, and its financial implications could be transformational over the long term.
The coming weeks may prove pivotal in determining whether this was just profit-taking amid confusion—or whether the market is right to question the long-term alignment between APLD and its most important tenant.
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