Applied Digital raised $160 million on Thursday, with Nvidia participating in the funding.
Applied Digital builds and operates next-generation data centers that cater to accelerated computing.
The stock soared as much as 76% on Thursday after news of the fresh investment.
Applied Digital is the latest AI stock grabbing attention on Wall Street after it raised $160 million on Thursday from high profile backers including chip titan Nvidia.
Shares of the data center operator soared as much as 76% on Thursday. It pared that gain to about 61% at 3:30, with shares trading at $5.26.
The private funding deal was priced at $3.24 per share with 49.4 million shares being issued to a group of institutional and accredited investors, including Nvidia.
"This strategic financing underscores Applied Digital's position as a trusted pioneer in the accelerated compute space," the company said in a press release.
Some of the $160 million raised will help fund the build-out of one of the world's largest data centers, the company said, as well as help build out additional capacity for 300 megawatts worth of data centers.
Applied Digital builds, operates, and leases next-generation data centers that cater to accelerated computing workloads using popular GPU chips from Nvidia.
"We have been doing a lot with Nvidia, and I think we're unique in that we have both the cloud aspect and the data center build-out. I think both are important to them," Applied Digital CEO Wes Cummins said to The Wall Street Journal.
Applied Digital said it is a "Preferred Nvidia Cloud Partner."
"We're proud of our strong relationship with NVIDIA," Cummins said.
This isn't the first time an investment from Nvidia has sparked a frenzy in another company's stock price.
In February, Nvidia disclosed relatively small investments in SoundHound AI and Nano X Imaging, resulting in similarly big moves.
And in July, Nvidia disclosed its investment in Serve Robotics, which led to a 241% surge in its stock price.
Despite the big rally in Applied Digital's stock on Thursday, it's still down 18% year-to-date.
Accounting for its Thursday surge, Applied Digital trades at a market valuation of about $900 million.
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