Pentanet Ltd (ASX: 5GG) shares are having an explosive finish to the week.
In early trade, the ASX tech stock was up as much as 120% to 11 cents.
The high-speed internet and cloud gaming provider's shares have pulled back since then but remain up 86% at the time of writing.
Image source: Getty Images
Why is this ASX tech stock rocketing?
Investors have been fighting to get hold of the company's shares on Friday after it announced the execution of an amendment to the GeForce NOWTM Alliance Partner Agreement with tech behemoth NVIDIA Corp (NASDAQ: NVDA).
According to the release, the agreement now formally recognises New Zealand as a serviceable territory, with a pathway to add neighbouring territories.
It also allows Pentanet to continue being the exclusive distributor of GeForce NOW in Australia.
The company highlights that since its launch, Pentanet has amassed 530,000+ GeForce NOW Powered by CloudGG members. These are serviced by infrastructure located in Perth and Sydney.
Furthermore, the ASX tech stock now has a solid base of paid memberships, effectively covering the fixed monthly recurring costs incurred in the early stages when the service was launched.
Pentanet's managing director, Stephen Cornish, was pleased with the news. Particularly given that the cloud gaming market in Australia is projected to experience significant growth in the coming years. He said:
Now that we have demonstrated success with Nvidia, we are moving to a Capex deployment model more in-line with our requirements, and retain a first right of refusal to continue being the sole distributor for GFN in Australia. With over half a million members now part of the CloudGG ecosystem, Pentanet continues to demonstrate the growing appetite for cloud gaming in our territory.
Nvidia's vice president of GeForce NOW, Phil Eisler, added:
Pentanet has fostered a deeply engaged cloud gaming community in Australia with GeForce NOW Powered by CloudGG. Its commitment to delivering GeForce RTX 3080-level performance that elevates experiences for gamers nationwide and underscores the company's dedication to pushes the boundaries of gaming and internet connectivity.
