Applied Digital Corp (APLD) saw its stock price surge 15.65% in extended trading on Wednesday, following the release of its fourth-quarter financial results that exceeded analyst expectations. The company, which provides cloud infrastructure solutions, demonstrated robust growth driven by increasing demand for artificial intelligence (AI) and machine learning services.

The Dallas, Texas-based data center operator reported quarterly revenue of $38 million, up 41% from a year ago and surpassing Wall Street estimates of $37.1 million. Despite posting a loss, Applied Digital showed significant improvement in its bottom line. The company reported an adjusted loss of 3 cents per share, considerably better than the 15 cent loss expected by analysts.

Investors were particularly encouraged by Applied Digital's strategic positioning in the AI 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 growing demand for AI-focused cloud infrastructure and positions Applied Digital as a key player in the sector.

The strong quarterly performance and positive outlook for AI-driven demand have fueled investor optimism, leading to the significant after-hours stock price increase. As companies increasingly seek efficient ways to scale their AI and machine learning capabilities, Applied Digital's cloud infrastructure solutions are well-positioned to capitalize on this growing market trend.