Core Insights - The article highlights the author's extensive experience in finance and strategy, particularly in the banking, mining, and energy sectors, which provides a strong foundation for investment analysis [1] - The author emphasizes a balanced investment approach, focusing on value stocks while also maintaining exposure to growth opportunities, reflecting a long-term investment philosophy [1] - The goal is to uncover promising under-the-radar stocks that may not yet be recognized by the broader market, leveraging a background in auditing and finance for unique insights [1] Company and Industry Summary - The author currently serves as the Head of Finance for a leading retail real estate owner and operator, overseeing complex financial operations and strategy [1] - The investment strategy has evolved over 13 years of active investing in the U.S. stock market, starting from the author's first paycheck [1] - The article aims to provide actionable ideas for investors, drawing from the author's hands-on investing experience and thorough research [1]

Core Viewpoint - The AI sector is experiencing significant growth, and there are numerous investment opportunities available, particularly in specific stocks that are well-positioned for the future [1]. Group 1: Key Companies in AI Investment - **Nvidia** is identified as the top AI stock for 2026, central to AI infrastructure with its GPUs, which are the leading option for parallel processing [2]. The company anticipates global data center capital expenditures to reach $3 trillion to $4 trillion by 2030, indicating strong future performance [3]. - **Broadcom** focuses on application-specific integrated circuits (ASICs) rather than general-purpose GPUs, which can outperform GPUs for specific tasks at a lower cost, suggesting significant growth potential in this segment [4][6]. - **AMD** is gaining traction in the GPU market, forecasting a compound annual growth rate (CAGR) of over 60% in its data center division revenues over the next three to five years, indicating a strong investment opportunity [7][8]. - **Taiwan Semiconductor** is the leading third-party chip manufacturer, essential for the AI buildout, making it a neutral investment option as it benefits from the overall growth in AI technology [9][10]. - **Alphabet** has shown unexpected success with its large language model, Gemini, and is expected to maintain momentum due to its strong advertising business [11][12]. - **Meta Platforms** is investing in AI capabilities for its social media platforms and exploring new products like AI-enabled glasses, which could provide new revenue streams [13][14]. - **Amazon** is expected to perform better in 2026, driven by growth in Amazon Web Services (AWS), which supports AI model training and operations [15]. Group 2: Emerging and Smaller Companies - **SoundHound AI** combines generative AI with voice recognition technology, showing rapid growth potential if widely adopted [16][17]. - **Nebius** is a data center operator focused on the AI market, with an expected revenue run rate of $551 million in Q3 2025, projected to reach $7 billion to $9 billion by the end of 2026, indicating substantial upside potential [18][19]. - **Applied Digital** operates a data center model that leases space to clients, providing long-term visibility into earnings through 15-year leases, representing a less risky investment with significant growth potential [20][21].

Core Insights - Applied Digital has experienced significant stock performance, with shares increasing approximately 250% over the past year, driven by strong revenue growth and advanced discussions with hyperscalers for data center capacity [1][2][8] Company Overview - Applied Digital operates as a specialized real estate company focused on AI infrastructure, recently announcing a spin-off of its cloud computing business to merge with EKSO Bionics, forming a new entity called ChronoScale [3] - The company builds and operates data centers specifically designed for AI workloads, leveraging its historical experience in Bitcoin mining to secure access to low-cost power [4] Financial Performance - In fiscal Q2, Applied Digital reported a revenue increase of 250% to $126.6 million, with the high-performance computing (HPC) segment contributing $85 million, primarily from tenant fit-out services [5] - The data center hosting business saw a 15% revenue growth to $41.6 million, with an operating income of $16 million [6] - Adjusted net income was reported at $0.1 million, with adjusted EBITDA rising to $20.2 million from $6.1 million year-over-year [7] Growth Prospects - The company is in advanced discussions for 900 megawatts of power across multiple sites, which is expected to drive future growth [8] - Current HPC capacity is at 100 megawatts, with plans to expand to 400 megawatts for CoreWeave by the end of 2027, and an additional 200 megawatts commitment from another customer [9] - Financing is in place for these projects, which are anticipated to yield significant growth if returns and operating leverage are demonstrated [10]

Core Insights - Applied Digital reported a remarkable 250% year-over-year revenue growth in Q2 of fiscal 2026, reaching $126.6 million, driven by surging demand for AI data centers [1] - The company has initiated the first 100 MW of AI computing capacity at its Polaris Forge 1 campus, with plans to expand to 400 MW for CoreWeave and has signed a 15-year lease for an additional 200 MW at Polaris Forge 2, projected to generate around $5 billion in revenue [2] Industry Challenges - The AI industry is facing a significant bottleneck in power generation, as AI data centers require vast amounts of electricity, which the current electric grid cannot support [3] - Major tech companies are exploring alternative power sources, including nuclear energy, but establishing new nuclear capacity will take years [4] - Gas turbines are being considered as a solution, but there is a severe shortage of these turbines, with new facilities not expected to come online until 2032 [6] Applied Digital's Strategy - Applied Digital aims to increase its capacity to 5 gigawatts over the next five years and is in advanced discussions for an additional 900 MW, but needs to address its power generation issues [7] - The company has partnered with Babcock & Wilcox to deliver 1 GW of power using steam turbines, which are expected to be operational by 2028, allowing for earlier market entry compared to traditional gas turbines [8][9] - This innovative approach could enable Applied Digital to bring AI data centers online 3 to 4 years ahead of competitors, securing long-term contracts with hyperscalers eager to expand their capacity [11][12]

Core Viewpoint - Applied Digital's stock surged nearly 18% due to accelerating AI-driven revenue and improved visibility around hyperscaler contracts [5][3]. Company Performance - Applied Digital's shares closed at $37.68, reflecting a 17.97% increase, with a market cap of $8.9 billion [2]. - The company has experienced a 677% growth since its IPO in 2022, with trading volume reaching 85.5 million shares, significantly above the three-month average of 32.2 million shares [2][7]. Revenue Growth - The company reported a 250% year-over-year increase in Q2 revenue, indicating a shift from speculative buildout to active deployment of AI infrastructure [5][6]. Hyperscaler Contracts - Management disclosed advanced discussions regarding a potential $5 billion hyperscaler lease, which could significantly alter the risk profile of the data center operator [6][7]. Analyst Upgrades - The surge in stock price was partly driven by fresh analyst upgrades and the strength of established data center operators, indicating a positive market sentiment towards AI infrastructure partnerships [3][7]. Future Outlook - Moving forward, the ability to secure large-scale leases and maintain high utilization rates will be critical for Applied Digital to sustain the elevated expectations reflected in its current stock price [7].

Core Insights - U.S. stocks experienced an upward trend, with the Dow Jones index increasing by approximately 200 points on Friday [1] Company Highlights - CG Oncology Inc (NASDAQ:CGON) saw its shares rise by 21.8% to $51.05 after announcing an expedited timeline for topline data from the Phase 3 PIVOT-006 clinical trial, now expected in the first half of 2026 [1][2] - Rich Sparkle Holdings Ltd (NASDAQ:ANPA) surged 113.6% to $51.70 following a $39 million offering of 3 million ordinary shares at $13 per share [3] - NovaBay Pharmaceuticals Inc (NYSE:NBY) increased by 34.4% to $12.81 [3] - Quanterix Corp (NASDAQ:QTRX) gained 29.3% to $8.42 after naming Everett Cunningham as President and CEO, effective January 19 [3] - MoonLake Immunotherapeutics (NASDAQ:MLTX) rose 21.7% to $17.45 after receiving FDA feedback on its clinical evidence strategy for Sonelokimab in Hidradenitis Suppurativa [3] - Enliven Therapeutics Inc (NASDAQ:ELVN) increased by 21.5% to $28.24, sharing positive initial data from its Phase 1b ENABLE trial for ELVN-001 in chronic myeloid leukemia [3] - Aeva Technologies Inc (NASDAQ:AEVA) surged 21.2% to $20.47 [3] - Loandepot Inc (NYSE:LDI) rose 20.1% to $2.93 [3] - ASP Isotopes Inc (NASDAQ:ASPI) increased by 19.7% to $7.71 [3] - Allogene Therapeutics Inc (NASDAQ:ALLO) gained 19.5% to $1.78 [3] - Opendoor Technologies Inc (NASDAQ:OPEN) rose 19.2% to $7.67 following a new housing market proposal by President Donald Trump [3] - Liquidia Corp (NASDAQ:LQDA) jumped 14% to $36.22 after announcing preliminary full-year 2025 YUTREPIA net sales [3] - Vistra Corp (NYSE:VST) gained 13.1% to $170.34 after entering into 20-year power purchase agreements for zero-carbon nuclear energy to support Meta's operations [3] - Oklo Inc (NYSE:OKLO) rose 12.6% to $109.95 after announcing an agreement with Meta for a 1.2 gigawatt power campus [3] - Applied Digital Corp (NASDAQ:APLD) surged 11.8% to $35.72, reporting strong second-quarter results and advanced talks with a new hyperscaler tenant [3] - AST SpaceMobile Inc (NASDAQ:ASTS) gained 10% to $99.65 [3] - SanDisk Corp (NASDAQ:SNDK) increased by 9.6% to $366.93 [3] - Mirion Technologies Inc (NYSE:MIR) rose 9.5% to $26.56 [3] - TTM Technologies Inc (NASDAQ:TTMI) gained 9.1% to $72.94 [3] - SoundHound AI Inc (NASDAQ:SOUN) rose 8.5% to $11.96 [3] - Kratos Defense & Security Solutions Inc (NASDAQ:KTOS) gained 8.3% to $112.64, with B. Riley Securities maintaining a Buy rating and raising the price target from $105 to $128 [3]

Group 1 - Applied Digital designs, builds, and operates data centers for AI, cloud, networking, and blockchain workloads, contributing to an average annual gain of 77% over the past decade and a 232% gain over the past year [2] - The demand for data center capacity is projected to triple worldwide by 2030, with Applied Digital signing deals worth $11 billion for data center capacity [2] - The company's price-to-sales ratio has increased from around 5 in 2024 to 38, indicating a lack of margin of safety, and it has been incurring losses due to high spending to meet demand [3] Group 2 - Despite the growth potential, there are concerns about the stock being overvalued and the company not being profitable at the moment [5] - Analysts have identified 10 stocks that are considered better investment opportunities than Applied Digital [6]

Core Viewpoint - Applied Digital Corporation (NASDAQ:APLD) is gaining attention as a promising investment opportunity in the tech sector, with recent coverage from multiple firms indicating strong growth potential and strategic developments [1][2][3]. Group 1: Analyst Ratings and Price Targets - Arete Research initiated coverage of Applied Digital with a Buy rating and a price target of $99 [1][3]. - Freedom Capital also initiated coverage with a Buy rating, setting a price target of $36, and projecting an adjusted EBITDA margin exceeding 60% within two fiscal years [2]. Group 2: Strategic Developments - Applied Digital announced a non-binding agreement to combine its cloud computing business with EKSO Bionics, forming a new entity called ChronoScale Corporation, which will focus on next-gen AI workloads [3]. - The proposed deal will result in Applied Digital owning approximately 97% of the new company, which will leverage Applied Digital's AI Factory campuses and innovative cooling technologies [3]. Group 3: Business Operations - Applied Digital designs, develops, and operates digital infrastructure solutions specifically for the High-Performance Computing (HPC) and AI industries in North America [4]. - The company operates through two main segments: Data Center Hosting Business and HPC Hosting Business [4].

Core Insights - The AI investment sector is expected to present significant opportunities in 2026, with potential for stocks to double in value within a year [1][16] Company Summaries - **Nebius**: - Focuses on providing computing power by renting data center space and utilizing advanced GPUs. It has sold out all available capacity and anticipates an annual run rate (ARR) of $7 billion to $9 billion by the end of 2026, up from $551 million at the end of Q3 [3][4] - Currently has a market cap of $25 billion and trades at 60 times sales, but its rapid growth may justify this valuation [5][13] - **Applied Digital**: - Operates data centers in North Dakota and is expanding its computing capacity. It has signed long-term leases for its facilities, indicating a stable future outlook. Revenue increased by approximately 84% year over year in Q1 of fiscal year 2026 [6][7] - Valuation remains stable as construction milestones are not expected until late 2026 [15] - **SoundHound AI**: - Combines generative AI with audio recognition to create versatile software platforms. Revenue surged by 68% year over year, and the company raised its full-year outlook, indicating strong growth potential [8][10] - Currently has a market cap of $4.6 billion and trades at 19 times sales, positioning it in the middle of the valuation spectrum among the three companies [9][15] Market Dynamics - The demand for computing power is unprecedented, with Nebius reporting that it has "sold out" all available capacity, highlighting the robust growth in the AI sector [4] - The AI arms race continues, with companies like Nebius and Applied Digital competing in similar markets, which could lead to significant stock performance in 2026 [3][16]

Core Insights - Applied Digital is strategically positioned to capitalize on the artificial intelligence (AI) boom, as evidenced by a significant rise in its stock price following the announcement of strong quarterly growth metrics [1] Financial Performance - The company's revenue surged by 250% year over year, reaching $126.6 million in the second quarter of fiscal 2026, which ended on November 30 [2] - Revenue from high-performance computing (HPC) hosting, primarily from AI-focused client CoreWeave, contributed $85 million during the quarter [2] - The legacy data center hosting business, serving cryptocurrency mining customers, saw a revenue increase of 15% to $41.6 million [4] - Applied Digital's net loss from continuing operations decreased by 76% to $31.2 million, while adjusted net income was slightly positive at $0.1 million, outperforming Wall Street's expectations of a loss [5] Market Position and Future Outlook - The company has a market capitalization of $8.3 billion, with shares trading between $31.06 and $35.50 [3] - Management anticipates robust demand for next-generation data centers, projecting over $400 billion in annual investments from cloud computing companies in AI infrastructure [6] - The company forecasts net operating income exceeding $1 billion within the next five years, driven by new customer acquisitions and expansion from existing clients [6]