Digi Power X (NASDAQ: DGXX) soared nearly 40% on Tuesday morning after announcing a 10-year, $1.1 billion colocation agreement with an AI hardware developer, Cerebras Systems.
Once a micro-cap player in energy infrastructure, DGXX seems to be making an aggressive pivot to seize the rising demand for high-density artificial intelligence data center capacity in 2026.
Following today’s meteoric rally, Digi Power X stock is trading up a remarkable 190% versus its year-to-date low.
Significance of Cerebras deal for Digi Power X stock
The aforementioned partnership with Cerebras is constructive for DGXX stock mostly because it anchors the company’s operational pipeline.
In its press release, Digi Power X said this decade-long contract is aimed at building a 40-megawatt purpose-built artificial intelligence (AI) data center in Columbiana, Alabama.
The deal comes with a $2.5 billion ceiling via expansion options – vastly exceeding DGXX’s market cap at the time of writing.
For investors, a marquee AI compute anchor tenant improves visibility into future revenue.
By securing a tier-one semiconductor partner, Digi Power X Inc transitions from a speculative grid operator into a tangible proxy for AI infrastructure buildout.
In short, DGXX ripped higher today because the Cerebras deal establishes a reliable floor for cash flows, mitigates developmental risks, and compresses the institutional risk premium.
Should you load up on DGXX shares at current levels
Beyond the Cerebras contract, Digi Power X shares underlying fundamentals show a company steadily gaining strength.
The Nasdaq-listed firm generated over $34 million in revenue last year, reflecting a significant year-on-year increase as its earlier power investments matured.
While profitability remains elusive during the expansion phase, Digi Power X’s owned real estate and finalized grid interconnections with Alabama Power neutralize two significant developmental bottlenecks and help buffer systemic risk.
At the time of writing, DGXX is going for roughly 11x sales – a valuation that leans on ambitious forward estimates.
Still, if infrastructure deployment tracks management’s targets, these multiple remain competitively discounted relative to mature data center peers.
How high could Digi Power X realistically fly in 2026?
The Cerebras news highlights a critical macroeconomic choke point: the global AI supply chain is constrained by limited power and cooling capacity.
And Digi Power X is strongly positioned to bridge that gap.
The Columbiana facility’s successful deployment will function as a definitive proof of concept, which may attract subsequent agreements with US hyperscalers.
By leaning heavily into “vertical integration” for specialized AI demands, DGXX shares are being insulated from commoditized energy pricing.
Even from a technical perspective, the Canadian company now sits firmly above its major moving averages (MAs), with an RSI in the early 80s indicating intense buying pressure.
Investors could also take heart in the fact that Wall Street analysts remain bullish as ever on DGXX for the remainder of 2026.
The consensus rating sits at “moderate buy” currently, with price targets going as high as $7, signaling potential upside of nearly 30% from here.
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