Macquarie shares lift off on $8 billion AI news

Investors are bidding up the Macquarie share price amid the latest AI news.

| More on:
A man has computer-generated images rushing through his head indicating an AI (Artificial Intelligence) concept of a communication network.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Macquarie Group Ltd (ASX: MQG) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) diversified financial stock closed yesterday trading for $225.28. In morning trade on Wednesday, shares are changing hands for $227.42 apiece, up 0.95%.

For some context, the ASX 200 is up 0.3% at this same time.

Created with Highcharts 11.4.3Macquarie Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

This comes following overnight news that the asset manager is making a major artificial intelligence (AI) data centre investment in the United States.

Macquarie shares increase AI-linked footprint

Macquarie shares are higher after the company announced that US-based next-generation digital infrastructure company Applied Digital has entered into a US$5.0 billion (AU$8.1 billion) perpetual preferred equity financing facility.

Funds managed by Macquarie Asset Management will invest up to US$900 million to help Applied Digital fund the completion of the Ellendale High Performance Computing (HPC) data centre campus.

The agreement also gives Macquarie Asset Management the right to invest up to an additional US$4.1 billion in Applied Digital's future HPC data centre pipeline, bringing the total investment to US$5 billion.

The preferred equity will accrue a dividend at a rate of 12.75% per annum. Macquarie will also take a 15% common equity interest in Applied Digital's HPC assets.

What did management say?

Commenting on the AI-linked investment that could help boost Macquarie shares longer-term, Anton Moldan, senior managing director of Macquarie Asset Management said, "We are excited to partner with Applied Digital to build and scale its HPC data centre platform."

Moldan added:

Applied Digital has a differentiated strategy with access to a unique near-term power portfolio across North America in markets attractive for computing needs which address the most demanding AI and other HPC applications at scale.

The significant progress at the Ellendale HPC campus makes this a very compelling opportunity for us as well as for potential hyperscale customers.

With our global experience as an owner and manager of data centre platforms, we see this as highly attractive opportunity to help build an industry-leading HPC data centre company well positioned in these high growth segments of the market.

Wes Cummins, CEO of Applied Digital, said, "At today's build costs, we will have a significant portion of the equity needed to construct over 2.0 GW of HPC data centre capacity, including our Ellendale HPC Campus."

Cummins continued:

With an 85% ownership stake in both existing and future HPC assets and access to a project-level preferred equity financing facility sufficient to fund our HPC project pipeline, we believe we are poised for transformative progress."

With today's intraday moves factored in, Macquarie shares are up 23% over the past 12 months.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

A cool dude looks back at the camera while ziplining above the treetops.
Financial Shares

Which dates could move the Zip share price in 2025?

Zip shares soared by 350% last year. Here are the dates that will shift the price this year.

Read more »

Hands reaching high for a trophy with a sunset in the background.
Broker Notes

IAG shares hit multi-year high amid broker prediction of double-digit profit growth

Morgan Stanley has issued a new note on the ASX insurance sector.

Read more »

A young man goes over his finances and investment portfolio at home.
Financial Shares

Is the AMP share price a buy? Here's my view

Should investors still feel excited about AMP?

Read more »

A businesswoman on the phone is shocked as she looks at her watch, she's running out of time.
Financial Shares

Which dates could move the IAG share price in 2025?

The insurance giant has just released its financial reporting calendar for the new year.

Read more »

Businesswoman whispering in male colleague's ear as he looks surprised
Financial Shares

IAG shares higher amid Macquarie tipping a 'strong' first-half result

Here's why Macquarie is expecting very positive numbers from IAG when it reports next month.

Read more »

Financial Shares

The AMP share price rocketed 71% in 2024. Here's how

Investors sent the AMP share price leaping higher in 2024. But why?

Read more »

A woman in a business suit and a man in a business suit boxing in a ring.
Financial Shares

ASX 200 financial stock races higher amid takeover bidding war

This stock has received competing takeover bids this month.

Read more »

Three happy multi-ethnic business colleagues discuss investment or finance possibilities in an office.
Financial Shares

The IAG share price soared 50% in 2024! Here's how

IAG shares smashed the benchmark returns in 2024. But how?

Read more »