Financial Data and Key Metrics - Revenue increased by 67% to $60.7 million this quarter, driven by cloud services contracts [10] - Data center hosting segment generated $34.8 million in revenue, while cloud services contributed $25.9 million [10] - Depreciation and amortization expenses totaled $34.4 million, up from $8 million in the same period last year [10] - Adjusted EBITDA for the quarter increased significantly to $20 million [11] - Adjusted net loss for the quarter was $21.6 million or $0.15 per basic and diluted share [11] - Cash, cash equivalents, and restricted cash stood at $86.6 million, with $143.6 million in debt and shareholders' equity at $241.8 million [11] Business Line Data and Key Metrics - Data center hosting business has 286 megawatts of capacity across two fully contracted locations in North Dakota, operating at full capacity [8] - Cloud services business has six clusters online, with plans to deploy additional clusters starting in the second half of fiscal year 2025 [9] - Significant progress made on amending lease financing for GPUs, allowing amortization over the expected useful life, improving reported results [9] Market Data and Key Metrics - The company is finalizing a lease with a US-based hyperscaler for the Ellendale HPC campus, with an initial 100-megawatt building and plans to expand to 400 megawatts [7] - Rising demand for proprietary HPC data centers among top-tier industry players, with significant interest from hyperscalers for 2025 and 2026 capacity [14] - The company is exploring opportunities to accelerate the monetization of its over 1.4 gigawatt pipeline [8] Company Strategy and Industry Competition - The company aims to become a platform capable of building and operating multiple HPC data centers at scale [15] - Strategic investments from prominent investors affirm the company's market position and highlight the potential for its strategic plan [15] - The company is positioning itself as a full-stack developer for hyperscalers, leveraging its early investment in the industry [14] Management Commentary on Operating Environment and Future Outlook - The company is encouraged by positive trends across its business and remains confident in its growth trajectory [9] - Management sees significant demand for HPC data centers, with limited capacity available for 2025 and 2026 [14] - The company is making executive team changes to better position itself for expansion and growth [15] Other Important Information - The company incurred $4.1 million in expenses this quarter for facilities not yet generating revenue, with plans to utilize these data centers in the future [11] - The company is exploring heat recirculation solutions for its HPC facilities, with potential applications in agriculture [52] Q&A Session Summary Question: Lease Negotiation Status - The exclusivity period for the lease negotiation has expired, and the company is finalizing the lease document [18] Question: Lease Details for Hyperscaler - The initial lease will be for 100 megawatts, with a reservation on the additional 300 megawatts, expected to be finalized in two separate leases [21] Question: Additional GPU Clusters - The company expects to deploy additional GPU clusters in the second half of fiscal year 2025, with demand influenced by customer preferences for Hopper or Blackwell GPUs [24][25] Question: Demand Environment and Future Data Centers - The company has seen increased interest from hyperscalers for 2025 and 2026 capacity and is working on securing an LOI for a second site, likely in the Dakotas [28][29] Question: Lease Finalization Timeline - The lease finalization is in the clerical phase, with expectations for completion within six to eight weeks [35][36] Question: Economics of Two Leases - The economics of the two leases are expected to be similar, with one structured as a Colo-style lease and the other as a yield on cost model [43][45] Question: Customer Turnover and Pricing in Cloud Services - Pricing for GPU services has remained stable, with customer turnover influenced by market dynamics and enterprise demand [48][50] Question: Heat Recirculation Solutions - The company is exploring heat recirculation solutions for its HPC facilities, with potential applications in agriculture, such as greenhouses or aquafarming [52] Question: Progress on Lease Finalization - The company estimates that 98.5% to 99% of the work on the lease finalization is complete, with the remaining tasks being clerical [55] Question: Yield on Cost and Prepayment for Future Buildings - The company is not disclosing specific yield targets but expects to secure leases and project financing before committing significant CapEx for future buildings [58][59]

Core Insights - Applied Digital Corporation reported a quarterly loss of $0.03 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.28, and an improvement from a loss of $0.10 per share a year ago, indicating an earnings surprise of 89.29% [1] - The company generated revenues of $60.7 million for the quarter ended August 2024, exceeding the Zacks Consensus Estimate by 12.35% and showing a substantial increase from $36.32 million in the same quarter last year [1] Financial Performance - The earnings surprise of 89.29% is notable, especially compared to the previous quarter where the actual loss of $0.52 per share was worse than the expected loss of $0.23, resulting in a surprise of -126.09% [1] - Over the last four quarters, the company has surpassed consensus EPS estimates only once, indicating inconsistent performance [1] - The current consensus EPS estimate for the upcoming quarter is -$0.29 on projected revenues of $62.35 million, while the estimate for the current fiscal year is -$1.12 on revenues of $263.45 million [4] Stock Performance - Since the beginning of the year, Applied Digital Corporation shares have increased by approximately 16.5%, underperforming compared to the S&P 500's gain of 20.6% [2] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting it is expected to perform in line with the market in the near future [4] Industry Context - The Financial - Miscellaneous Services industry, to which Applied Digital Corporation belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, which may negatively impact stock performance [5] - Ponce Financial, another company in the same industry, is expected to report a quarterly earnings decline of 41.7%, with revenues projected to decrease by 10.7% year-over-year [5]

Core Viewpoint - Applied Digital Corp reported significant revenue growth in its fiscal first quarter, driven by its Cloud Services Business, despite facing net losses and operational challenges [2][3][5] Performance Overview and Challenges - The company achieved revenues of $60.7 million, a 67% increase year-over-year, exceeding analyst expectations of $54.85 million [2] - A net loss of $4.2 million was recorded, translating to $0.03 per share, which was better than the estimated loss of $0.29 per share [2] - Adjusted net loss stood at $21.6 million, influenced by $4.4 million in expenses from facilities and equipment not yet generating revenue [2] Financial Achievements and Industry Impact - Revenue growth was primarily driven by the Cloud Services Business, contributing $25.9 million [3] - The company secured strategic financing of $160 million from institutional investors, including NVIDIA, enhancing its position in the accelerated compute space [3] Key Financial Metrics and Analysis - Cost of revenues increased to $61.1 million from $25.2 million, mainly due to higher depreciation, amortization, and personnel costs [4] - Selling, general, and administrative expenses decreased to $14.3 million from $16.2 million, indicating improved cost management [4] - Cash and cash equivalents rose to $86.6 million from $31.7 million, while debt increased to $143.6 million from $125.4 million, highlighting a stronger liquidity position [4] Operational Highlights and Future Prospects - The company expanded its Cloud Services Business by adding two clusters, bringing the total to six clusters, each equipped with 1,024 GPUs [5] - A lease agreement for a 100 MW facility for HPC applications is being finalized, with plans to expand capacity to 400 MW [5] - These developments align with the company's vision to become a leading platform for HPC data centers, positioning it to meet the growing demand for digital infrastructure solutions [5]

Revenue and Financial Performance - Total revenue for the three months ended August 31, 2024, was $60.7 million, a 67.1% increase compared to $36.3 million in the same period in 2023[14] - Net loss attributable to common stockholders improved to $4.3 million for the three months ended August 31, 2024, compared to a net loss of $11.5 million in the same period in 2023[14] - Basic and diluted net loss per share improved to $0.03 for the three months ended August 31, 2024, compared to $0.11 in the same period in 2023[14] - Operating income for the three months ended August 31, 2024, was $9.5 million, compared to an operating loss of $7.4 million in the same period in 2023[14] - Net loss decreased to $4.247 million in August 2024 from $11.854 million in August 2023, showing a significant improvement in financial performance[22] - Revenue increased by $26.6 million (83%) from $32.1 million in Q3 2023 to $58.8 million in Q3 2024, driven by increased data center capacity and the launch of Cloud Services[179] - Adjusted EBITDA was $19.993 million in Q3 2024, representing 33% of revenues, compared to $9.864 million (27% of revenues) in Q3 2023[176] - Adjusted EBITDA for the three months ended August 31, 2024, was $19.9 million, compared to $9.8 million for the same period in 2023[200] - Adjusted operating loss for the three months ended August 31, 2024, was $14.3 million, compared to an adjusted operating income of $1.6 million for the same period in 2023, reflecting a significant decline in performance[199] - Adjusted net loss attributable to Applied Digital Corporation for the three months ended August 31, 2024, was $21.6 million, compared to a net loss of $129,000 for the same period in 2023[199] Costs and Expenses - Cost of revenues increased to $61.1 million for the three months ended August 31, 2024, compared to $25.2 million in the same period in 2023[14] - Cost of revenues increased by $35.8 million (142%) from $25.2 million in Q3 2023 to $61.1 million in Q3 2024, primarily due to higher depreciation, lease expenses, and personnel costs[180] - Selling, general, and administrative expenses decreased by $1.8 million (11%) from $16.2 million in Q3 2023 to $14.3 million in Q3 2024, mainly due to reduced stock-based compensation[182] - Depreciation and amortization expenses increased to $34.316 million in August 2024 from $7.86 million in August 2023[22] - Depreciation expense for the three months ended August 31, 2024, was $3.0 million, compared to $2.2 million for the same period in 2023[45] - Total net lease cost for the three months ended August 31, 2024, was $44.643 million, including $8.962 million in operating lease cost and $35.626 million in finance lease cost[103] - Interest expense, net increased by $5.2 million (243%) from $2.1 million in Q3 2023 to $7.3 million in Q3 2024, driven by higher finance leases and interest-bearing loans[185] Cash Flow and Liquidity - Cash flow from operating activities was negative at $75.89 million in August 2024, compared to a positive $4.517 million in August 2023[22] - Cash flow from financing activities increased to $163.365 million in August 2024 from $23.663 million in August 2023, driven by borrowings and stock issuances[22] - Total cash, cash equivalents, and restricted cash increased to $86.557 million in August 2024 from $31.688 million in May 2024[42] - The company had a working capital deficit of $302.6 million, raising substantial doubt about its ability to continue as a going concern, but subsequent events alleviated this doubt[43] - As of August 31, 2024, the company had unrestricted cash and cash equivalents of $58.2 million and negative working capital of $302.6 million[201] - The company expects to have sufficient liquidity to support operations and meet working capital needs for at least the next 12 months[209] - Liquidity sources include cash on hand, customer payments, debt financing, and access to public capital markets[209] - The company may face challenges in raising additional funds on favorable terms, which could negatively impact financial conditions[209] - Failure to secure necessary financing could force delays, reductions, or termination of operations and development plans[209] - The company's liquidity estimates are based on assumptions that may prove incorrect, potentially leading to faster capital depletion[209] - If capital resources are used sooner than expected, the company may need to seek additional financing earlier than projected[209] - Additional financing may not be available on acceptable terms or at all, posing risks to the company's financial stability[209] - The inability to raise capital as needed would negatively impact the company's ability to pursue its business strategy[209] Debt and Equity Transactions - The company issued 6.1 million shares in an offering, net of costs, during the three months ended August 31, 2024[18] - The company converted $56.2 million of debt into equity during the three months ended August 31, 2024[18] - The company issued $60.726 million in preferred stock in August 2024, with issuance costs of $5.444 million[22] - Long-term debt increased to $106.2 million as of August 31, 2024, up from $79.5 million as of May 31, 2024, primarily due to the CIM Promissory Loan of $105.0 million[59] - Remaining principal payments on long-term debt total $156.7 million, with $112.7 million due in FY28 and $12.0 million from SAFE agreements[60] - During the three months ended August 31, 2024, $48.0 million of Yorkville Convertible Debt was converted into approximately 11.4 million shares of common stock[63] - The CIM Promissory Note balance was $105.0 million as of August 31, 2024, with warrants issued to purchase up to 9,265,366 shares of Common Stock[64] - CIM Warrants were issued in two tranches: 6,300,449 Common Shares (Initial Warrants) at $4.8005 per share and 2,964,917 Common Shares (Additional Warrants) at the same price, with a five-year term[65] - The fair value of the Initial Warrants and Additional Warrants was $4.36 and $3.04 per warrant, respectively, totaling $36.5 million[67] - The Company entered into two SAFE agreements totaling $12.0 million, which may convert into preferred stock or entitle the investor to proceeds in liquidity or dissolution events[70][71] - The Company sold approximately 3.1 million shares for net proceeds of $14.6 million under a $25 million "at the market" sale agreement with Roth Capital Partners[76] - The Company entered into a Sales Agreement allowing the sale of up to $125,000,000 in shares of common stock, with $16.4 million net proceeds from 3.0 million shares sold as of August 31, 2024[77] - The Company entered into a Standby Equity Purchase Agreement (SEPA) with YA Fund, allowing the sale of up to $250.0 million of common stock, with a $2,125,000 commitment fee paid in 456,287 shares of common stock[78][79] - The Company issued approximately 9.6 million shares of common stock under equity incentive plans, with $(2.9) million and $5.6 million of stock-based compensation recognized in the three months ended August 31, 2024 and 2023, respectively[80] - The Company sold 301,673 shares of Series E Redeemable Preferred Stock for proceeds of $6.9 million, with a fixed dividend rate of 9.0% per annum[87][88] - The Series E Preferred Stock has a $25.00 per share liquidation value, with optional redemption fees ranging from 9.00% to 0.00% based on the redemption timing[91] - Series F Convertible Preferred Stock private placement closed on August 30, 2024, for total proceeds of $50.0 million, with a 3.5% fee paid to Northland Securities, Inc.[93] - Series F Convertible Preferred Stock holders are entitled to cumulative preferential dividends at an annual rate of 8.0% of the Stated Value of $1,000 per share[93] - The fair value of Yorkville convertible debt was $30.463 million as of August 31, 2024, calculated on an as-converted basis using quoted market prices[98][99] - The Company recorded a loss on the change in fair value of debt of $6.4 million in its unaudited condensed consolidated statements of operations[99] - The company completed a private placement on September 5, 2024, issuing 49.4 million shares of common stock at $3.24 per share, raising approximately $160 million in gross proceeds[128] - The company received the final $20.0 million of funding associated with the CIM Promissory Note on October 8, 2024, bringing the total balance outstanding under the note to approximately $125 million[131] - The company entered into a Dealer Manager Agreement on September 23, 2024, to offer up to 2.5 million shares of Series E-1 Redeemable Preferred Stock at $25.00 per share[130] - The company converted $17.8 million of Initial YA Notes into approximately 5.8 million shares of common stock and $4.1 million of the May Note into approximately 1.4 million shares of common stock, leaving $6.2 million outstanding across all YA Notes[129] - The company borrowed $125 million under the CIM Promissory Note as of August 31, 2024[202] - During the quarter ended August 31, 2024, the company sold approximately 3.1 million shares for net proceeds of $14.6 million[203] - The company entered into a securities purchase agreement for the private placement of Series F Convertible Preferred Stock, raising $50.0 million[206] - The company closed a private placement of common stock, raising approximately $160 million in gross proceeds[207] - The company received $17.4 million in payments for future cloud services and $26.9 million in payments for future data center hosting services during the three months ended August 31, 2024[207] Segment Performance - Total revenue for the three months ended August 31, 2024, was $60.7 million, with the data center hosting segment contributing $34.8 million and the cloud services segment contributing $25.9 million[118] - The data center hosting segment reported a segment profit of $35.9 million, while the cloud services segment reported a segment loss of $15.8 million for the three months ended August 31, 2024[119] - Total segment profit for the three months ended August 31, 2024, was $17.1 million, compared to $0.8 million for the same period in 2023[119] - Data Center Hosting segment operating profit increased by $26.9 million (298%) from $9.0 million in Q3 2023 to $35.9 million in Q3 2024, largely due to the Garden City facility sale[189] - Cloud Services segment operating loss increased by $8.4 million from $7.4 million in Q3 2023 to $15.8 million in Q3 2024, driven by higher amortization and occupancy costs[190] - HPC Hosting segment operating loss increased by $2.2 million (290%) from $0.8 million in Q3 2023 to $2.9 million in Q3 2024, due to stock-based compensation and payroll expenses[191] - Data Center Hosting Business operates at full capacity with 106 MW in Jamestown and 180 MW in Ellendale, North Dakota as of August 31, 2024[147] - Cloud Services Business recognized $25.9 million in revenue during the fiscal quarter ended August 31, 2024[149] - HPC Hosting Business is negotiating a 400 MW capacity lease with a US-based hyperscaler, including a 100 MW facility under construction in Ellendale, North Dakota[150] Asset and Liability Management - Total stockholders' equity increased to $241.8 million as of August 31, 2024, compared to $127.9 million as of August 31, 2023[18][19] - The company received $25 million in connection with the sale of its Garden City facility[14] - Restricted cash related to letters of credit totaled $28.3 million, held in money market funds[39] - Property and equipment increased to $495.6 million as of August 31, 2024, up from $354.8 million as of May 31, 2024, driven by construction in progress which rose to $313.6 million from $190.2 million[45] - Deferred revenue balance decreased to $16.9 million as of August 31, 2024, from $39.4 million at the beginning of the period, primarily due to revenue recognition of $60.4 million[48] - Customer deposits balance decreased to $13.7 million as of August 31, 2024, from $15.4 million at the beginning of the period, with $2.8 million received and $1.5 million refunded during the quarter[49] - The Company had letters of credit totaling $28.3 million as of August 31, 2024, with restricted cash held in separate accounts[61] - Future minimum lease payments as of August 31, 2024, total $318.554 million, with $150.292 million for operating leases and $168.262 million for finance leases[105] - The Company has a minimum commitment of approximately $68.1 million related to the energy services agreement for its Jamestown, North Dakota co-hosting facility[108] - The Company has entered into leases which are executed but not yet commenced with total minimum payments of approximately $18.9 million[106] - As of August 31, 2024, the company had total assets of $937.7 million, with the data center hosting segment accounting for $143.1 million and the cloud services segment accounting for $338.8 million[124] - The company received the remaining $25 million of the purchase price held in escrow related to the sale of its Garden City hosting facility, which was included in the gain on classification of held for sale[116] - Company sold Garden City hosting facility for up to $87.3 million, with $25 million released from escrow after meeting conditional approval requirements[147][148][161] Legal and Regulatory Matters - The Company is involved in a putative securities class action lawsuit, with potential material impact on results of operations if an unfavorable outcome occurs[111][112] - A derivative action was dismissed without prejudice on June 5, 2024, with no pending or threatened lawsuits as of August 31, 2024, that could materially affect the Company's operations[114][115] Revenue Recognition and Customer Contributions - Revenue recognition for data center hosting and cloud services is based on fixed rates over the term of agreements, with advanced payments recorded as deferred revenue[32][33] - Revenue from Customer A decreased to 48% of total revenue for the three months ended August 31, 2024, down from 68% in the same period in 2023, while Customer G contributed 16% of revenue in 2024[47] - Gain on classification of held for sale was $24.8 million in Q3 2024, primarily due to $25.0 million released from escrow funds related to the sale of the Garden City facility[183] Stock-Based Compensation and Equity Plans - Stock-based compensation expense was $2.9 million for the three months ended August 31, 2024[18] - The Company issued approximately 9.6 million shares of common stock under equity incentive plans, with $(2.9) million and $5.6 million of stock-based compensation recognized in the three months ended August 31, 2024 and 2023, respectively[80] Future Commitments and Agreements - The Company entered into a CIM Promissory Note for initial borrowing of $15 million, with potential subsequent borrowings of up to $110 million and an additional $75 million accordion feature[151][153] - YA Fund converted $64.0 million of YA Notes into 16.2 million shares of common stock, with $6.2 million principal amount outstanding as of August 31, 2024[155] - Company entered into a Standby Equity Purchase Agreement with YA Fund for up to $250.0 million of common stock, with a commitment fee of $2,125,000 paid in shares[162][163] - Series F Preferred Stock offering closed on August 30, 2024, raising $50.0 million with an annual dividend rate of 9.0%[165][166]

Financial Performance - Revenues for the fiscal first quarter 2025 were $60.7 million, representing a 67% increase compared to the same period last year[2] - The net loss for the fiscal first quarter 2025 was $4.2 million, or $0.03 per basic and diluted share, an improvement from a net loss of $11.5 million, or $0.11 per share, in the prior year[11] - Adjusted net loss for the fiscal first quarter 2025 was $21.6 million, with an adjusted net loss per diluted share of $0.15, impacted by $4.4 million in expenses related to non-revenue generating facilities[12] - Adjusted EBITDA for the fiscal first quarter 2025 was $20.0 million, up from $9.9 million in the same quarter of the previous year[13] - Total revenue for the three months ended August 31, 2024, was $60.704 million, a 67.2% increase from $36.323 million in the same period last year[31] - Operating income for the same period was $9.483 million, compared to an operating loss of $7.368 million in the prior year[31] - Net loss attributable to common stockholders decreased to $4.291 million, down from $11.457 million year-over-year[31] - Adjusted operating loss income (Non-GAAP) for the three months ended August 31, 2024, was $(14,323) thousand, compared to $1,607 thousand for the same period in 2023[35] - Adjusted operating margin decreased to (24)% for the three months ended August 31, 2024, from 4% in the prior year[35] - Net loss attributable to Applied Digital Corporation (GAAP) improved to $(4,247) thousand for the three months ended August 31, 2024, compared to $(11,457) thousand in the same period last year[35] - EBITDA (Non-GAAP) for the three months ended August 31, 2024, was $37,422 thousand, a significant increase from $(1,312) thousand in the prior year[38] - Adjusted EBITDA (Non-GAAP) rose to $19,993 thousand for the three months ended August 31, 2024, compared to $9,864 thousand in the same period of 2023[38] Cash and Assets - As of August 31, 2024, the Company had $86.6 million in cash and equivalents, up from $31.7 million at the end of fiscal 2024[14] - Total current assets increased to $84.110 million from $30.262 million as of May 31, 2024[26] - Cash and cash equivalents at the end of the period were $58.215 million, up from $3.339 million[26] - The company reported a significant gain of $24.808 million on the classification of held-for-sale assets[31] Expenses and Liabilities - The company incurred depreciation and amortization expenses of $34.316 million, compared to $7.860 million in the prior year[32] - Cash flow used in operating activities was $(75.890) million, a decrease from $4.517 million in the same period last year[32] - The company raised $60.726 million from the issuance of preferred stock during the quarter[32] - Total liabilities rose slightly to $640.604 million from $638.037 million[27] Business Operations - Two additional clusters were added to the Cloud Services Business, increasing the total to six clusters, each with 1,024 GPUs, contributing to $25.9 million in revenue from this segment[7] - The Company is finalizing a lease agreement for a 100 MW facility under construction, with plans to expand total capacity to 400 MW through additional buildings[4][8] - The Company’s 106 MW facility in Jamestown and 180 MW facility in Ellendale are operating at full capacity, with a recent sale of a facility generating $25 million in escrow funds[9] Management and Organizational Changes - Management announced executive changes to enhance the Company's growth management, with new appointments effective October 14, 2024[6] Research and Development - Research and development expenses decreased to $36 thousand for the three months ended August 31, 2024, from $184 thousand in the prior year[35] Other Expenses - Stock-based compensation expense was $(3,072) thousand for the three months ended August 31, 2024, down from $5,641 thousand in the same period last year[35] - Diligence, acquisition, disposition, and integration expenses were $2,888 thousand for the three months ended August 31, 2024, compared to $10 thousand in the same period last year[35] - Loss on abandonment of assets was $628 thousand for the three months ended August 31, 2024, with no comparable figure in the prior year[35] - Gain on classification of held for sale was $(24,808) thousand for the three months ended August 31, 2024, with no comparable figure in the prior year[35]

Applied Digital Corporation APLD will release earnings results for its first quarter, after the closing bell on Wednesday, Oct. 9.Analysts expect the Dallas, Texas-based company to report a quarterly loss at 29 cents per share, versus a year-ago loss of 12 cents per share. Applied Digital projects to report revenue of $54.85 million for the quarter, according to data from Benzinga Pro.On Sept. 5, Applied Digital entered agreements for a $160 million private placement financing priced at market, from a group ...

Core Viewpoint - Applied Digital Corporation (APLD) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending August 2024, with the earnings report set to be released on October 9, 2024 [1] Revenue and Earnings Estimates - The company is expected to post a quarterly loss of $0.28 per share, reflecting a year-over-year change of -180% [2] - Revenues are projected to be $54.03 million, representing a 48.8% increase from the same quarter last year [2] Estimate Revisions - The consensus EPS estimate has been revised 14.6% higher in the last 30 days, indicating a reassessment by covering analysts [3] - A positive Earnings ESP of +53.15% suggests that analysts have recently become more optimistic about the company's earnings prospects [6][7] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [5] - The current Zacks Rank for Applied Digital Corporation is 3, indicating a potential for beating the consensus EPS estimate [7] Historical Performance - In the last reported quarter, the company was expected to post a loss of $0.23 per share but actually reported a loss of $0.52, resulting in a surprise of -126.09% [8] - The company has not beaten consensus EPS estimates in any of the last four quarters [8] Conclusion - While the company is positioned as a compelling earnings-beat candidate, other factors should also be considered when evaluating the stock ahead of its earnings release [9]

Core Insights - The investment will enable Applied Digital to construct data centers that are specifically optimized for high-performance computing [1] Company Analysis - The news is significant for Nvidia (NVDA) and Applied Digital (APLD) stock investors, indicating potential growth opportunities for both companies [1]

Group 1 - Applied Digital Corporation (APLD) shares increased by 65.7% to close at $5.37, following a notable trading volume compared to typical sessions, despite a 16.9% loss over the past four weeks [1] - The surge in share price is linked to a $160 million funding announcement from institutional and accredited investors, including NVIDIA [1] - APLD is expected to report a quarterly loss of $0.29 per share, reflecting a year-over-year change of -190%, while revenues are projected to be $51.84 million, a 42.7% increase from the previous year [1] Group 2 - The consensus EPS estimate for APLD has been revised 38.8% higher in the last 30 days, indicating a positive trend that typically leads to price appreciation [2] - APLD currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [2] - In the same industry, Alerus (ALRS) closed 0.5% lower at $21.44, with a consensus EPS estimate of $0.44, unchanged over the past month, representing a -2.2% change from the previous year [2]

Group 1: Company Developments - Applied Digital raised $160 million in a financing round with backing from Nvidia, indicating strong investor interest in AI-related ventures [1] - The company builds and leases data center space and has launched an AI cloud-computing operation powered by Nvidia's chips [1] - The new funding will be used to support growth, manage debt-financing for a data center project in North Dakota, and expand its cloud-computing business [1] Group 2: Industry Trends - Other companies in the AI space, such as CoreWeave, have also seen increased valuations following investments from Nvidia [2] - The generative AI market in the automotive sector is projected to grow from $335 million in 2023 to $2.6 billion by 2033, with a compound annual growth rate of 23% [3] - A PYMNTS report indicates that 93% of auto industry stakeholders believe generative AI will significantly impact their field, and 75% plan to integrate it into operations this year [2][3]