Applied Blockchain (NASDAQ:APLD) stock soared 27% in pre-market trading today. The rally appears to have been sparked by a deal the company made with Marathon Digital (NASDAQ:MARA) and by the recent increases in the value of cryptocurrencies.
Applied Blockchain provides crypto mining and co-hosting services. Yesterday, the company announced it had agreed to provide hosting services to Marathon Digital for five years. Under the deal, Applied Blockchain “will provide comprehensive hosting services for Marathon’s Bitcoin miners at Applied Blockchain’s owned and operated co-hosting datacenters.”
Cumulatively, Applied Blockchain will offer Marathon 200 megawatts of Bitcoin mining capacity.
APLD Stock Boosted by Rebounding Crypto and New Guidance
Meanwhile, Marathon announced yesterday it had “secured approximately 254 megawatts of new hosting arrangements for its Bitcoin mining operations, with an option to increase to 324 megawatts, from a variety of hosting providers.” In the wake of those deals, Marathon believes it has enough hosting capacity to meet its goal of about 23.3 exahashes per second (EH/s) for Bitcoin mining.
Like APLD stock, MARA stock is trending and climbing today. Its shares advanced 5.5% in pre-market trading.
The recent rebound of cryptos is also likely helping to lift APLD stock. In the last five trading days, Bitcoin (BTC-USD) has jumped 8%, while Ethereum (ETH-USD) has rallied 30% and Dogecoin (DOGE-USD) has gained 11%.
Additionally, shortly after the market closed yesterday, Applied Blockchain increased the midpoint of its revenue outlook for its quarter that ended in May from $5.95 million to $7.20 million. Applied Blockchain added that it’s planning to build a third co-hosting data center that should increase Applied Blockchain’s total hosting capacity to 500 megawatts.
The company added it now believes its annual EBITDA, excluding certain items, can reach $100 million after its new data center is launched. The facility is expected to become operational at the beginning of 2023.
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On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.