Applied Digital Corp (APLD) shares surged 5.17% in pre-market trading on Wednesday, following the announcement of a significant lease agreement with CoreWeave, a specialized cloud services provider backed by Nvidia. The deal is expected to generate approximately $7 billion in revenue for Applied Digital over the lease period, showcasing a substantial growth opportunity for the data center operator.

The agreement, disclosed on Monday, involves two 15-year leases with CoreWeave. This long-term commitment not only provides Applied Digital with a steady revenue stream but also positions the company as a key player in the growing cloud services and AI infrastructure market. The partnership with CoreWeave, known for its Nvidia-backed specialized cloud services, further underscores Applied Digital's strategic positioning in the high-performance computing sector.

Adding to the positive sentiment, B. Riley has adjusted its price target on Applied Digital from $8 to $15, while maintaining a Buy rating. This upward revision reflects growing confidence in the company's business model and future prospects. According to FactSet, Applied Digital currently has an average rating of Buy among analysts, with a mean price target of $14.81, indicating potential for further upside from current levels.