Rumble (RUM) Stock Soars! $1.17B AI Deal Fuels Investor Frenzy!
Shares of Rumble (NASDAQGM:RUM), the video-sharing platform, experienced a significant surge, jumping 10.8% in morning trading. This dramatic increase follows the company's announcement of its intent to acquire Northern Data, a German AI cloud firm, in an all-stock transaction valued at approximately $1.17 billion. The market's reaction highlights the perceived transformative potential of this strategic move.
Rumble Expands into AI Infrastructure
The acquisition of Northern Data represents a major step for Rumble in diversifying its business beyond its core video-sharing platform. By acquiring Northern Data, Rumble gains control of Ardent data centers and its Taiga GPU-as-a-service business. This includes access to a substantial inventory of over 20,000 Nvidia H100 GPUs, which are highly sought-after for AI applications.
Details of the Deal
Under the proposed terms of the all-stock transaction, Northern Data shareholders would receive 2.319 Rumble shares for each share they own. This would result in Northern Data shareholders owning approximately one-third of the combined company.
Interestingly, the stock's surge occurred despite Rumble reporting second-quarter results that fell short of revenue estimates and indicated a decline in monthly active users. This suggests that investors are primarily focused on the long-term potential of the AI-focused acquisition.
Market Volatility and Recent Performance
Rumble's shares are known for their volatility. The stock has experienced 55 moves greater than 5% over the past year. However, moves of this magnitude are considered rare, even for Rumble, indicating the significant impact of this acquisition news on market perception.
Just 10 days prior to this announcement, Rumble's stock dropped 3.4% following the release of a weaker-than-expected U.S. jobs report. Concerns about a slowing economy were fueled by the report, which showed that the U.S. economy added only 73,000 jobs, significantly below economists' expectations.