Core Insights - Applied Digital (APLD) has secured a significant 250 MW, 15-year lease agreement with CoreWeave, projected to generate approximately $7 billion in revenues [1][6] - The deal includes phased delivery of 100 MW by Q4 2025 and 150 MW by mid-2026, with an option for an additional 150 MW [1] - APLD is transitioning from a hybrid operator to a pure-play AI/HPC infrastructure platform, focusing on AI hosting environments [2] Company Strategy - APLD is divesting its Cloud Services business to concentrate on delivering tailored AI hosting solutions, aiming for a capacity of 1 GW and considering a REIT conversion [2][6] - The Ellendale campus is designed for power-dense deployments, utilizing liquid cooling and benefiting from low-cost energy, making it suitable for compute-heavy workloads [1][6] Competitive Landscape - CoreWeave, as APLD's anchor tenant, is enhancing its position in GPU-powered infrastructure, having raised over $1 billion to expand its data-center network [3] - Equinix is also adapting to the AI landscape by deploying GPU-enabled setups and has announced a joint venture to raise over $15 billion for expanding its xScale data centers [4] Financial Performance - APLD's shares have increased by 70.4% year-to-date, contrasting with a 3.5% decline in the industry [5] - The forward price-to-sales ratio for APLD stands at 12.42, significantly above the industry average and its five-year median of 1.42 [8] - The Zacks Consensus Estimate for APLD's fiscal 2026 earnings indicates a year-over-year rise of 73.6% [10]

Group 1: C3.ai Overview - C3.ai went public four and a half years ago but currently trades nearly 40% below its IPO price, facing challenges such as cooled growth and customer concentration issues [2] - Despite difficulties, C3.ai's top-line growth accelerated in fiscal 2024 and fiscal 2025, extending a crucial deal with its largest client, Baker Hughes, which accounts for over 30% of its revenue [3] - Analysts expect C3.ai's revenue to grow at a compound annual rate of 19% from fiscal 2025 to fiscal 2027, but it trades at 7.5 times this year's sales and does not expect to turn profitable soon [5] Group 2: Applied Digital Overview - Applied Digital builds and rents out data centers to cloud and AI companies, benefiting from the AI boom and transitioning into a real estate investment trust (REIT) [7][8] - The company operates five data centers in North Dakota and plans to open more in South Dakota and Iowa, with a projected revenue growth rate of 48% from fiscal 2024 to fiscal 2027 [9][10] - If Applied Digital divests its cloud business and invests in expanding data centers, it could justify its higher valuation and potentially eclipse C3.ai's valuation in the next two years [11] Group 3: DigitalOcean Overview - DigitalOcean operates a cloud infrastructure platform targeting smaller customers, differentiating itself from larger public cloud providers [12] - The company has expanded through acquisitions, including Cloudways in 2022 and Paperspace in 2023, serving over 600,000 customers with a focus on larger clients [13] - Analysts expect DigitalOcean's revenue and EPS to grow at compound annual rates of 14% and 12% from 2024 to 2027, with a market cap of $2.7 billion and trading at 3.1 times this year's sales [14]

Core Insights - Applied Digital's stock experienced significant gains, closing up 8.5% in a day, with its share price more than doubling over the past week [1][3] - The bullish sentiment was driven by the latest jobs report from the Bureau of Labor Statistics (BLS), which showed the U.S. economy added 139,000 net jobs in May, exceeding economists' expectations of 125,000 [3][4] - Despite concerns that strong job growth could indicate higher inflation, the BLS revised previous months' job growth figures downward, which may alleviate inflation fears and support growth stocks like Applied Digital [4][5] Company Developments - Applied Digital has entered a new data-center lease agreement with CoreWeave, expecting to generate over $7 billion in sales from service agreements over the next 15 years [6] - Following its recent valuation gains, the company is now valued at approximately 12 times this year's expected sales, indicating a potential for entering a new growth phase [7]

Core Insights - Applied Digital (APLD) is implementing an ambitious expansion strategy focused on hyperscale infrastructure, supported by significant investments from Macquarie Asset Management and SMBC totaling up to $5.375 billion [1][7] - The Ellendale campus is central to APLD's data center vision, with the first building expected to provide 100 megawatts of IT load by the end of 2025, and plans for additional buildings to increase capacity to over 400 megawatts [2][7] - APLD aims to become a leader in high-performance computing (HPC) infrastructure and is exploring strategic alternatives for its Cloud Services business, potentially transitioning to a REIT structure [3][7] Competition Update - CoreWeave (CRWV) has raised over $1 billion to expand its GPU-powered data center capacity, positioning itself as a significant competitor in the AI-focused cloud market [4] - Equinix (EQIX) announced a joint venture to raise over $15 billion for expanding its xScale data centers in the U.S., adding more than 1.5 gigawatts of capacity to meet AI and cloud demands [5] Financial Performance - APLD's shares have increased by 67.1% year-to-date, contrasting with a 5% decline in the industry [6] - The company trades at a forward price-to-earnings ratio of 12.85, which is above the industry average and its five-year median of 1.42 [8] - The Zacks Consensus Estimate indicates a projected 73.6% rise in APLD's fiscal 2026 earnings year-over-year [9]

Core Insights - The AI sector is at a pivotal moment, with early leaders distinguishing themselves and presenting significant investment opportunities across the AI value chain [1][2] - Companies leveraging AI are experiencing substantial productivity gains, while those that do not adopt AI risk becoming obsolete [2] - The total addressable market for AI is in the trillions, but current adoption levels are still early, creating a unique investment window [2] Company Summaries - **Nvidia** dominates the data center GPU market with a share of 70% to 90%, reporting record revenue of $44.1 billion in Q1 fiscal 2026, with data center revenue up 73% year-over-year [5][6] - **ASML Holding** is the sole manufacturer of extreme ultraviolet lithography machines, ensuring a significant market share and multiyear revenue visibility due to a substantial backlog [7][8] - **Microsoft** is monetizing AI through its Copilot subscriptions, generating billions in revenue shortly after launch, leveraging its vast distribution network of 1.5 billion Office users [9] - **Lemonade** utilizes AI to enhance insurance operations, processing 70% of claims instantly, leading to improved loss ratios and lower operational expenses compared to traditional insurers [10][11] - **SoundHound AI** has seen over 80% annual revenue growth by providing voice AI technology, with a focus on edge-computing to address privacy and latency concerns [12] - **Palantir Technologies** is experiencing over 70% annual commercial revenue growth, driven by its AI platforms that address security concerns in corporate AI adoption [13] - **Applied Digital** operates specialized data centers for AI workloads, securing long-term contracts for its entire 400MW capacity, positioning itself for predictable revenue growth [14] - **Oklo** develops small modular reactors to meet the energy demands of AI data centers, with each reactor providing 15MW to 50MW of clean power [15] - **CoreWeave** focuses on GPU-accelerated cloud computing, projecting $5 billion in revenue for 2025, with expectations of doubling to $11.6 billion in 2026 [16] - **BigBear.ai** applies AI in defense and commercial analytics, reporting Q1 2025 revenue of $34.8 million and maintaining a $385 million backlog for long-term revenue visibility [17] Investment Strategy - The identified companies represent various layers of the AI ecosystem, from infrastructure to specialized applications, showcasing strong fundamentals and clear growth paths [18]

Market Performance - Jinli Permanent Magnet (06680) rose over 17% due to significant increases in overseas medium and heavy rare earth prices, which are expected to gradually transmit to the domestic market [1] - Zhixing Technology (01274) increased over 3% after securing a platform-based logistics vehicle contract with a leading domestic brand [1] - Weimeng Group (02013) surged over 9% as its upgraded Weimeng Guide Agent product is anticipated to benefit from the growth of WeChat e-commerce [1] - Zhaoke Ophthalmology-B (06622) gained over 8% following FDA approval for a new drug trial application for cyclosporine eye gel [1] - Zai Ding Pharmaceutical (09688) rose over 5% after reporting excellent data from the low-dose group of ZL-1310 [1] - Lianlian Digital (02598) saw a mid-session increase of over 5% as it partnered with BVNK to provide stablecoin payment solutions for its merchants [1] - Reading Group (00772) increased over 7% after acquiring a 26.67% stake in Yihua Kaitian, with its IP+AI strategy expected to unlock more value [1] - NIO opened nearly 4% higher, projecting a year-on-year revenue growth of 11.8%-15% for Q2 [1] - Kuaishou-W (01024) rose over 6% as its Kecing AI recently launched a new 2.1 series model, with institutions optimistic about its profitability [1] - Meituan (03690) surged over 3%, reaching a nearly two-month high, with southbound funds continuing to accumulate for 13 consecutive days [1] US Market Highlights - Applied Digital (APLD.US), a stock related to Nvidia, surged nearly 30%, with a 94% increase over three trading days, as long-term contracts are expected to generate $7 billion in revenue [2] - Tesla (TSLA.US) fell 3.55% due to declines in both the Chinese and European automotive markets, with a 15% year-on-year drop in China's May wholesale sales of new energy passenger vehicles [2] - MongoDB (MDB.US) saw a nearly 15% increase in after-hours trading following better-than-expected Q1 results and an $800 million stock buyback plan [2] - Broadcom (AVGO.US) rose over 3% before earnings, reaching a new historical high, with Morgan Stanley stating that AI is operating at full speed, expecting strong Q2 results [3] - Meta increased over 3% as it was reported to be accelerating the development of ultra-lightweight open-headset projects [3] - Guidewire Software (GWRE.US) surged over 16% after exceeding Q3 earnings expectations and raising its guidance [3] - Dollar Tree (DLTR.US) fell over 8% after warning of potential 50% declines in adjusted earnings due to tariffs and weak consumer spending [3] - STMicroelectronics (STM.US) rose nearly 11% amid reports that Italy and France are considering splitting its joint management rights [3]

Group 1 - Applied Digital's stock experienced a significant increase, closing up 29.6% on Wednesday, and has risen approximately 78% over the past week [1][3] - B. Riley issued a new coverage report, reiterating a buy rating and raising the one-year price target from $8 to $15 per share, indicating a bullish outlook for the stock [3] - The company announced two 15-year lease agreements with CoreWeave, which is expected to generate around $7 billion in revenue [4] Group 2 - The recent deal with CoreWeave has positively impacted the company's market perception, establishing a solid revenue base and enhancing its valuation to approximately $3 billion [5] - The endorsement from CoreWeave is seen as a significant positive indicator for Applied Digital's future performance [5]

Core Insights - Applied Digital Corp (APLD) has experienced a significant stock increase of 29.2%, reaching $13.24, following a major announcement of a 15-year, $7 billion partnership with CoreWeave to develop AI data centers [1] - The stock has seen a remarkable rally, with a 48% increase on Monday and a total rise of 73% since the beginning of 2025 [2] Options Activity - APLD has recorded an extraordinary options trading volume, with 489,000 contracts exchanged, which is six times the typical daily volume, including 392,000 call options [2] - The most popular options are the weekly 6/6 13-strike call and the 15-strike call, indicating strong bullish sentiment among traders [2] Analyst Sentiment - Following the recent developments, several analysts have raised their price targets for APLD, although the 12-month consensus target price stands at $13.55, suggesting limited upside potential from current levels [3] - The short interest in APLD is notably high, representing 35.8% of the stock's available float, indicating potential volatility in the stock price [3]

I’m a retired Wall Street PM specializing in TMT; since kickstarting my career, I’ve spent over two decades in the market navigating the technology landscape, focusing on risk mitigation through the dot com bubble, credit default of ‘08, and, more recently, with the AI boom. In one word, what I’d like my service to revolve around is momentum.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the ...

Core Viewpoint - Applied Digital Corporation has experienced a significant stock price surge, driven by a major long-term agreement with CoreWeave, positioning the company prominently in the expanding AI sector [1][2][11] Business Agreement Details - The partnership with CoreWeave involves leasing 250 megawatts (MW) of power capacity at Applied Digital's datacenter campus in Ellendale, North Dakota, under two lease agreements lasting approximately 15 years [5] - This deal is projected to generate about $7 billion in total revenue over the lease terms, marking a transformative financial opportunity for Applied Digital [5] Market Reaction - On June 2, 2025, Applied Digital's stock closed at $10.14 per share, reflecting an increase of $3.31, or 48.46%, in a single day, with trading volume reaching approximately 238.54 million shares, significantly above the average [6] - There was a notable increase in call options activity, indicating strong investor sentiment regarding the stock's future price increase [7] Strategic Positioning - The agreement with CoreWeave aligns with Applied Digital's strategic shift towards developing advanced data centers tailored for AI and high-performance computing (HPC) [8][10] - The Ellendale campus is designed to meet the growing demand for AI-specific data center space, driven by advancements in machine learning and large language models [9][10] Future Outlook - The CoreWeave deal enhances Applied Digital's credibility in the AI infrastructure market and signals a promising phase with clearer long-term revenue potential [10][11]