Why Applied Digital Stock Is Soaring Today

Applied Digital (NASDAQ: APLD) stock is posting big gains in Tuesday's trading. The company's share price was up 9.4% as of 11:30 a.m. ET and had been up as much as 25.1% earlier in the day's trading.

Applied Digital is soaring today following news that Macquarie Asset Management will be investing up to $5 billion in the company. The stock is also getting a boost from the latest inflation report from the Bureau of Labor Statistics.

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Applied Digital surges on investment deal and macroeconomic news

Applied Digital published a press release today announcing that it had entered into an agreement to receive up to $5 billion in funding from Macquarie to bolster its high-performance computing (HPC) initiatives. Through multiple funds that it manages, Macquarie will be investing up to $900 million in one of Applied Digital's HPC data centers.

Through the deal, Macquarie will receive a perpetual preferred and 15% common equity interest in Applied Digital's HPC business segment. Applied Digital will continue to own the remaining 85% of the segment, although the arrangement leaves the door open for Macquarie to invest an additional $4.1 billion in the company's future HPC data center projects.

In addition to the big investment news, Applied Digital stock is also seeing positive momentum from the BLS's latest Producer Price Index (PPI) report. The data was published before the market opened this morning and showed that the PPI increased only 0.2% annually -- significantly below the 0.4% increase forecast by economists. The report has helped to lessen investor concerns about inflation and is powering bullish momentum for growth stocks.

What's next for Applied Digital?

After the market closes today, Applied Digital is scheduled to publish results for the second quarter of its current fiscal year -- which ended Nov. 30. The company has seen strong sales momentum in conjunction with demand for artificial intelligence (AI) computing, and excitement surrounding the stock has been building following news that Nvidia had invested in the business.

The average Wall Street estimate calls for Applied Digital to post a loss of $0.14 per share on revenue of $61.6 million. The average target calls for revenue in the period to increase 46% year over year, and the stock is likely to see big moves in tomorrow's trading, depending on how the company's actual performance compares to analyst forecasts.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.