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Applied Digital (APLD) is trading roughly flat following the announcement of a non-binding term sheet with EKSO Bionics (EKSO) for a proposed business combination involving Applied Digital's cloud computing unit, Applied Digital Cloud. Once completed, the combined business will operate as ChronoScale, an accelerated compute platform designed to support AI training and inference workloads. The transaction is expected to close in 1H26.

• The deal is structured to separate Applied Digital's high-growth accelerated compute platform from its capital-intensive data center ownership and development business, allowing each segment to scale independently.
• This separation could unlock higher and more appropriate valuation multiples, particularly for the AI-focused compute platform.
• ChronoScale will house Applied Digital's GPU-based cloud infrastructure, positioning it directly in the rapidly expanding market for AI training and inference compute.
• The platform is expected to leverage the mature operating track record of Applied Digital Cloud to rapidly deploy next-generation GPU infrastructure optimized for dense, reliable, and efficient accelerated compute.
• Applied Digital's remaining data center business maintains its own growth runway, benefiting from sustained demand for digital infrastructure without being overshadowed by the economics of AI compute.

Briefing.com Analyst Insight:

The proposed ChronoScale transaction meaningfully sharpens Applied Digital's strategic narrative by highlighting its AI compute capabilities rather than lumping them together with lower-multiple data center assets. Investors have increasingly rewarded pure-play AI infrastructure stories, and this move could help close the valuation gap if ChronoScale demonstrates customer traction and scalable economics. That said, the deal remains non-binding and won't close until 1H26, leaving execution and market risks firmly in play. While the long-term AI demand backdrop is compelling, APLD shares may remain sensitive to deal developments and clarity around the financial profile of both standalone businesses before a sustained re-rating can occur.