CoreWeave shares soared another 5% in premarket trading, extending a 25% rally after the company entered into a major long-terminfrastructure agreement with Applied Digital Corp.

The agreement includes an option for CoreWeave to expand its presence at the facility with an additional 150 megawatts of IT load, potentially raising the total commitment to 400 megawatts. Applied Digital projects that it will generate approximately $7 billion in revenue from the contracts over the duration of the leases.

The move signals CoreWeave's ongoing expansion as a key infrastructure provider in the rapidly growing AI computing market. The company specializes in delivering GPU-accelerated compute for AI workloads and the Applied Digital partnership is viewed as a major step in scaling its operational footprint.

Nvidia is a significant investor in CoreWeave, and also sells the cloud company a lot of chips. CoreWeave Inc.'s stock has been a big gainer since the company went public in March, with the rally fueled by optimism around the cloud startup's ability to gain Big Tech customers as it leverages Nvidia Corp.'s backing.

CoreWeave - which went from being a cryptocurrency-mining company called Atlantic Crypto Corp., to a publicly traded cloud provider with a market capitalization of about $56 billion, - rents access to data centers bulked up by Nvidia chips.

CoreWeave went public on March 28, pushing through an initial public offering that struggled. The company was expected to sell 49 million shares in the IPO, priced between $47 and $55, but demand wasn't sufficient; CoreWeave could only sell 37.5 million shares, with the IPO pricing at just $40 a share. Nvidia offered to put in a $250 million order at $40 a share, CNBC reported. The stock started trading at $39 but closed its first day at $40.

Gil Luria, head of technology research at D.A. Davidson, says it's "very unusual" for an IPO to include strategic investors like Nvidia.

Prior to that, CoreWeave had an agreement to provide Nvidia with infrastructure and platform services worth $320 million, a contract it entered into in April 2023. At the time of CoreWeave's IPO filing, the company listed that Nvidia owned about 6% of CoreWeave shares. A recent 13-G filing, revealing Nvidia's holdings as of March 31, showed a 7% stake.

"I want to say it's unprecedented, but at the very least, extraordinarily rare, for an IPO to be anchored by a customer, or a vendor, or any corporate," Luria said.