Applied Digital Reports 250% Revenue Growth in Q2 and Secures 900MW Commitments
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
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Source: Yahoo Finance
- Significant Revenue Growth: Applied Digital reported a remarkable revenue of $126.6 million in fiscal Q2, reflecting a 250% year-over-year increase, which underscores its strong performance in the AI infrastructure sector and solidifies its market position.
- High-Performance Computing Contribution: The company's high-performance computing segment generated $85 million in revenue, with $73 million derived from tenant fit-out services for large clients, which, despite lower gross margins, lays the groundwork for future high-margin recurring revenue growth.
- Data Center Expansion Plans: Applied Digital is in advanced discussions with multiple large cloud providers to secure 900 megawatts of power over the next few years, which is expected to significantly enhance the company's long-term growth potential.
- Financial Condition Analysis: While the company reported an adjusted net income of $0.1 million and adjusted EBITDA of $20.2 million, its negative cash flow and $2.6 billion in debt increase investment risks, necessitating cautious evaluation by investors.
Analyst Views on APLD
Wall Street analysts forecast APLD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for APLD is 42.78 USD with a low forecast of 35.00 USD and a high forecast of 56.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
10 Buy
0 Hold
0 Sell
Strong Buy
Current: 31.940
Low
35.00
Averages
42.78
High
56.00
Current: 31.940
Low
35.00
Averages
42.78
High
56.00
About APLD
Applied Digital Corporation is a designer, builder, and operator engineered data centers and colocation services for Artificial Intelligence (AI), cloud, networking, and blockchain workloads. The Company operates through two operating segments: the Data Center Hosting Business and the HPC Hosting Business. The Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. Its custom-designed data centers allow customers to rent space based on their power requirements also it serves one crypto mining customer. The HPC Hosting Business designs, builds, and operates data centers which are designed to support high-compute applications using advanced technologies and infrastructures to provide services to customers. The Company builds over two HPC focused data center facilities to provide 100 megawatts (MW) and 150 MW. Its subsidiaries include APLD Rattlesnake Den I LLC, Applied Talent Resources LLC, Sai Computing LLC, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
