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Investing.com -- Target Hospitality Corp (NASDAQ:TH) stock surged 8% on Monday after the company announced a 400-bed expansion to its previously announced data center community, significantly increasing the project’s scope and revenue potential.
The expansion represents a 160% increase from the initial 250-bed community, creating an expanded facility capable of supporting up to 650 individuals. According to the company, the expansion is expected to generate approximately $40 million in committed minimum revenue over its initial two-year term through March 2028, with four one-year extension options available through March 2032.
With this addition, the total contract value for the expanded data center community increases to approximately $83 million in committed minimum revenue, representing over a 90% increase from the initial $43 million contract value.
Target Hospitality plans to utilize a portion of its existing asset portfolio for the expansion, resulting in a capital investment of approximately $10 to $15 million. Construction on the expansion will begin in the fourth quarter of 2025, with completion anticipated in the first quarter of 2026.
The company, which provides modular accommodations and hospitality services, noted that it is in advanced discussions regarding other potential commercial opportunities to support growing demand in the AI and data center sector. Target’s ability to deliver customized communities with speed-to-market solutions positions it as part of the data center value chain, creating a strategic growth vertical.
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