Needham pointed out earlier today that Nvidia (NVDA) and Related Companies are joining in a $160M financing round for Applied Digital (APLD). The bearish view of the deal for Applied Digital includes the dilution and selling shares near one-year lows, whereas the bullish view includes Related being a big deal in real estate and Nvidia adding credibility to the name, the analyst tells investors in a research note. Needham views the investment as an overall positive for Applied Digital. While the ongoing dilution continues to be a drag, the partnership with Related offers benefits longer term, such as for the other two phases of Ellendale which adds 300MW of capacity, contends the firm. Needham also believes “it is hard to read too much into this deal as it relates to the potential hyperscaler lease–in either a more positive or more negative direction.” Applied Digital shares are up 36%, or $1.62, to $6.17 in afternoon trading.
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