Applied Digital Corp (APLD) stock skyrocketed 29.31% in pre-market trading on Thursday, following the release of better-than-expected fourth-quarter financial results and growing optimism about the company's position in the artificial intelligence (AI) market.

The Dallas-based data center operator reported a quarterly adjusted loss of $0.03 per share, significantly outperforming analyst expectations of a $0.15 loss. Revenue for the quarter reached $38 million, up 41% year-over-year and slightly above Wall Street estimates of $37.1 million. This strong performance was primarily driven by surging demand for AI, machine learning, blockchain, and cloud services, which has increased interest in Applied Digital's offerings.

Investors were particularly encouraged by Applied Digital's strategic positioning in the rapidly growing AI infrastructure market. The company has secured two 15-year lease agreements with CoreWeave, projected to deliver around $7 billion in revenue over the lease term. This long-term partnership underscores the increasing demand for AI-focused cloud infrastructure solutions, positioning Applied Digital as a key player in the sector. In response to the positive results and outlook, several analysts have raised their price targets for APLD, with Roth MKM increasing its target to $24 from $17.50 and Needham raising its target to $16 from $12. The surge in Applied Digital's stock price aligns with a broader trend of AI-related stocks rallying, as the AI boom continues to drive investor interest in companies providing essential infrastructure for AI and machine learning services.