Investing.com -- Shares of Applied Digital (NASDAQ: APLD) advanced 3% on Wednesday following a dual tailwind: a newly announced joint venture with Soluna Holdings (NASDAQ: SLNH) for a Texas-based AI data center, and a reinstated "Buy" rating from Roth/MKM.

The two companies have entered a definitive agreement to co-develop a 50-megawatt (MW) artificial intelligence data center at Soluna’s Project Dorothy 3 site near Silverton, Texas. The facility will be entirely powered by the adjacent Briscoe Wind Farm.

Under the terms of the deal, Applied Digital will provide the development capital in exchange for a 51% controlling interest in the project entity. Soluna will contribute the land and power-related assets, retaining the remaining 49% stake.

The transaction is slated to close by the end of the calendar year, pending customary conditions, including the execution of definitive agreements and the approval of a tax abatement in Briscoe County, Texas.

Securing a tenant for the site is already underway. ChronoScale Holdings (NASDAQ: CHRN)—a publicly traded company majority-owned by Applied Digital—has signed a non-binding letter of intent to lease the planned facility upon completion.

Adding to Wednesday’s upward momentum, Roth/MKM analyst Bryan Baratian reinstated coverage of Applied Digital with a "Buy" rating and a $35 price target.

"We believe the current valuation provides investors with asymmetric upside," Baratian noted. He attributed the bullish outlook to three key drivers: execution certainty stemming from secured equipment and a scalable AI factory design, rising market lease economics for new capacity, and power-backed growth in favorable data center markets.

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