(Reuters) -Applied Digital topped Wall Street estimates for first-quarter revenue on Thursday, driven by surging demand for its data center services as more customers scale up computing to support fast-growing generative AI applications.

Shares of the company rose 3.3% in extended trading.

Businesses are racing to deploy next-generation AI models, driving demand for high-performance data center infrastructure that can support intensive computing workloads.

Applied Digital finalized a new lease agreement with CoreWeave in August for an additional 150MW in North Dakota.

This brings the total anticipated contracted lease revenue to about $11 billion, which includes the $7 billion in revenue from the initial two 15-year leases with CoreWeave announced earlier this year.

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