Get ready for a thrilling ride into the world of AI infrastructure stocks! Applied Digital is the latest hot topic, and its story is about to unfold.
On Friday, Applied Digital's stock soared, and it's all thanks to their impressive quarterly report. This Dallas-based company, which specializes in data centers for AI, cloud computing, and blockchain, saw an 84% revenue surge in its fiscal first quarter. That's a massive jump, and it exceeded all analyst expectations!
But here's where it gets controversial... Applied Digital reported an adjusted loss of 3 cents per share, which is in line with the previous year. However, Wall Street was expecting a much larger loss of 13 cents per share. So, is this a sign of a turning point for the company?
Applied Digital's CEO, Wes Cummins, believes they are perfectly positioned to capitalize on the AI boom. With hyperscalers investing a whopping $350 billion into AI this year, Applied Digital aims to be the go-to provider for the necessary infrastructure. And the market seems to agree, with Applied Digital stock skyrocketing over 31% on Friday morning.
Through Thursday's close, APLD stock has seen a remarkable 283% increase for the year. It boasts an impressive IBD Relative Strength Rating of 99, putting it at the top of the performance charts for the past 12 months. Applied Digital is joining a growing list of AI infrastructure plays that are catching fire with investors, including Iren, Nebius, Vertiv, and WhiteFiber.
And this is the part most people miss... Applied Digital's journey is quite unique. They started by serving cryptocurrency mining firms but quickly shifted to data center hosting. When AI computing took off, they pivoted again, and now they're a key player in this space. Applied Digital operates a data center campus in Ellendale, N.D., and is constructing another near Harwood, N.D. Their primary customer is CoreWeave, and they provide the facilities for companies to install their computing equipment.
AI chipmaker Nvidia has even taken notice, investing roughly 3% in Applied Digital in late 2024. This move has analysts buzzing, with Roth Capital's Darren Aftahi reiterating his buy rating and raising his price target to $56 from $43. Northland Capital Markets' Mike Grondahl also kept his outperform rating and upped his price target to $40 from $30.
The potential catalyst for Applied Digital stock could be the announcement of a tenant for their second campus, currently under construction. So, will this be the next big move for Applied Digital? Only time will tell, but one thing is certain: the world of AI infrastructure is heating up, and Applied Digital is a stock to watch.
What do you think? Is Applied Digital a smart investment, or are there better options in the AI infrastructure space? Let's discuss in the comments and share our insights!
