RUM Group (NASDAQ: RUM) shares surged more than 20% in premarket trading on Tuesday, hitting an intraday high of $8.73—the highest level since September 4—following reports that the company has reached a massive $13.7 billion computing agreement with Anthropic. The news comes as other major tech stocks slipped, underscoring the market's enthusiasm for AI infrastructure plays.
Anthropic deal details and context
According to reports, the deal would make RUM Group one of the largest neocloud providers globally. Anthropic has been aggressive in securing compute capacity, having recently announced a $1.2 billion-per-month agreement with SpaceX, a $35 billion partnership with Lambda, and a $50 billion deal with the same firm. It also inked a $45 billion agreement with Nscale and a separate deal with CoreWeave, the world's largest neocloud operator.
RUM Group, formerly known as Rumble, has been repositioning itself as a major data center player. The company recently increased its ownership in Northern Data to 98% and plans to take it to 100%. Tether remains its largest shareholder. The rebranded entity now encompasses Rumble, its video platform popular with conservative audiences, and Quake AI, its AI data center business that boasts over 22,000 H100 and H200 chips, with plans to expand capacity.
Quake AI to drive future growth
Quake AI is expected to become a larger revenue contributor than Rumble. In the most recent quarter, RUM Group reported revenue of $40.4 million, up 58% year-over-year, with Northern Data contributing $10 million. Management guided third-quarter revenue between $83 million and $93 million, and believes Quake has the potential to generate $3 billion in annual revenue.
However, Rumble's core media business shows signs of slowing. SimilarWeb data indicates that Rumble's traffic fell 2.3% last month to 33.2 million visits, while YouTube's traffic rose slightly to 30.3 billion. This divergence highlights the competitive pressure Rumble faces from larger platforms.
Technical analysis and risks
From a technical standpoint, RUM Group stock had been in a steep decline, falling from an August high of $10.59 to a low of $6.90 on Friday. The recent rebound has pushed the stock above its 50-day moving average, and the formation of a hammer candlestick suggests potential for further upside in the near term.
Yet, history suggests that such AI-driven rallies can be fleeting. Other neocloud stocks have experienced similar surges followed by sharp pullbacks. The capital-intensive nature of the AI data center industry means RUM Group will likely need to raise additional funds, which could dilute shareholders and pressure the stock. As Anthropic's AI applications expand, the demand for compute is undeniable, but so is the cost.
Investors should also consider the broader context: AI stocks face pressure as key players urge slower development, and Oracle's AI backlog shows the scale of investment needed. While the Anthropic deal could be transformative, the market's reaction may already reflect much of the optimism.
In the coming sessions, traders will watch whether RUM Group can hold above the $7 support level. A break below that could signal the end of the rally. For now, the stock's momentum is positive, but the sustainability of these gains remains uncertain given the heavy capital requirements and competitive dynamics in the AI infrastructure space.
This article is for informational purposes only and does not constitute financial advice.
