• Digi Power X will begin construction of a data center in Columbiana, Alabama, and supply Cerebras with 40 MW of computing power.
• The company will be paid $1.1 billion over ten years, and Cerebras will have the option to expand on the agreement by $1.4 billion.
• The company will first bring online 15 MW of computing power by mid-December.

Shares of Digi Power X Inc. (DGXX) shot up over 27% and are set for their best one-day percentage gains in over a year and a half on Tuesday after the company struck a multi-billion-dollar deal with Cerebras Systems, an artificial intelligence chipmaker and an emerging rival to Nvidia (NVDA), to provide up to 40 megawatts of compute power.  

Under the terms of the deal, Digi Power will begin construction of a data center in Columbiana, Alabama, to be developed in two phases.

The deal comes amid soaring demand in the AI industry for compute power, infrastructure, and energy capacity, as companies pour billions into the lucrative technology and rush to secure their dominance in the highly competitive yet opportunistic sector.

Digi Power X Unlocks A Long-Term Revenue Source

Digi Power X said the deal offers long-term revenue visibility, as the initial terms are for $1.1 billion paid over ten years, and include the option for Cerebras to expand it by another $1.4 billion.

“Signing a $1.1 billion anchor contract with a premier AI compute company is validation of everything we have built - our team, our sites, our infrastructure capabilities, and our vision for what a next-generation data center operator looks like,” said Digi Power X CEO Michael Amar. “We are no longer building toward the top tier of this industry. We are in it.”

The company noted that the data center will be built on a property it already owns, setting it apart from lease-dependent competitors in the space.

In the first phase of the project, the company will bring online 15 megawatts (MW) of computing power by mid-December this year, and in its second phase, Digi Power X will deliver the remaining 25 MW by the end of the first quarter next year.

What Retail Traders Think About DGXX

On Stocktwits, retail sentiment about DGXX turned ‘extremely bullish’ from ‘neutral’ while message volumes quadrupled over the last 24 hours.

One user on the platform said they are not selling the stock at all, anticipating more upside as the company secures more contracts.

Another user expects the stock to hit $8.

DGXX stock has more than doubled in value so far this year, and nearly quadrupled over the past 12 months.

At the time of writing, over 71.5 million DGXX shares changed hands on the Nasdaq, more than 34 times its three-month average trading volume.

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