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Investing.com -- Applied Digital shares leaped 30% in pre-open trading Tuesday following reports from the Wall Street Journal of a substantial investment from Macquarie's asset-management arm. The investment, set to funnel up to $900 million into Applied Digital's data-center campus in North Dakota, underscores a significant vote of confidence in the company's expansion strategy.
The deal grants Macquarie a right of first refusal to invest an additional $4.1 billion in future Applied Digital data centers for the next 30 months, potentially bolstering the company's growth trajectory. In exchange for its investment, Macquarie will acquire a 15% stake in Applied Digital's high-performance computing business, leaving Applied Digital with an 85% majority.
This influx of capital from Macquarie is poised to accelerate the development of Applied Digital's North Dakota data-center campus, a key component of the company's growth plans. The partnership also provides Applied Digital with a substantial financial cushion as it scales up operations to meet the increasing demand for data center services.
The market's positive response to the announcement reflects investor optimism regarding the scale and terms of the investment. Applied Digital's ability to attract such a significant commitment from a reputable institutional investor like Macquarie suggests a robust business model and promising prospects for its high-performance computing division.
The investment by Macquarie represents a strategic move to secure a foothold in the burgeoning digital infrastructure sector, as data centers continue to be critical in supporting the exponential growth of digital data and cloud services. The terms of the deal, particularly the right of first refusal for future investments, align with Applied Digital's ambitious expansion plans and provide a framework for sustained collaboration between the two entities.
Investors will be watching closely to see how Applied Digital deploys the capital to accelerate its growth and how the partnership with Macquarie evolves over the coming months. With this deal, Applied Digital is poised to enhance its position in the competitive data center market, leveraging the investment to fuel its strategic initiatives and drive long-term shareholder value.
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