Core Viewpoint - Applied Digital's stock is experiencing significant sell-off pressure, primarily due to broader market concerns regarding growth-dependent AI stocks and macroeconomic risks [1][2]. Group 1: Stock Performance - Applied Digital's share price fell by 10.8% as of 3 p.m. ET, having previously dropped as much as 18% during the trading session [1]. - The stock has declined over 10% in the last month, with a current market capitalization of approximately $1.8 billion, translating to a valuation of about 7 times this year's expected sales [5]. Group 2: Market Sentiment and Influences - Traders are selling off AI stocks as they focus on emerging macroeconomic risks, leading to a weakening bullish sentiment ahead of Nvidia's fourth-quarter report [2]. - Concerns are heightened by the Trump administration's plans to impose new tariffs on Canada and Mexico, which may exacerbate inflation fears and impact the tech sector [3]. Group 3: Nvidia's Impact - Nvidia's upcoming earnings report is critical for Applied Digital, as it is a significant investor in the company and a bellwether for the data center market and AI demand [4]. - There are worries that Nvidia may provide softer-than-expected guidance, particularly in light of reports suggesting Microsoft might be moderating its data center expansion strategy [6]. Group 4: Growth Metrics - Despite the recent pullback, Applied Digital's stock is still up by 99% over the past year, with a year-over-year sales growth of 51% reported last quarter, indicating a potential valuation premium [5][6].

Core Viewpoint - Applied Digital's stock experienced a significant decline of 15.3% amid broader market movements and specific concerns regarding the AI sector and data center spending [1][2][4]. Group 1: Stock Performance - Applied Digital's share price fell by 15.3% during Monday's trading session, contrasting with the S&P 500's decline of 0.5% and the Nasdaq Composite's drop of 1.2% [1]. - The stock faced substantial sell-offs as investors reduced their positions in AI stocks ahead of Nvidia's fourth-quarter earnings release [2][3]. Group 2: Market Influences - Concerns about Nvidia's upcoming earnings report and Microsoft's potential cutbacks in data center spending contributed to the stock's decline [2][4]. - Microsoft CEO Satya Nadella expressed skepticism about the actual value generated by AI compared to the hype, which further pressured Applied Digital's stock [4]. Group 3: Future Outlook - The upcoming Nvidia earnings report is expected to significantly influence Applied Digital's stock valuation, with potential for large movements depending on Nvidia's guidance [5][6]. - If Nvidia's guidance exceeds expectations, Applied Digital's shares could rise sharply; however, there is considerable downside risk if the outlook falls short of Wall Street forecasts [6].

Core Insights - Applied Digital's stock has experienced significant gains, with a rise of 12.7% as of 10:15 a.m. ET, peaking at 17.3% earlier in the trading session [1] - Nvidia's recent SEC disclosure revealed that it still holds approximately 7.7 million shares of Applied Digital, indicating strong confidence in the company despite selling off other AI-related investments [2][3] - Applied Digital secured $375 million from Sumitomo Mitsui Banking Corporation for its North Dakota data center, enhancing its capacity for AI computation services [5] - The company reported a non-GAAP loss per share of $0.06 and revenue of $63.87 million, reflecting a year-over-year increase of about 51%, outperforming Wall Street expectations [6] Company Developments - Nvidia's decision to maintain its investment in Applied Digital, while divesting from other AI holdings, suggests a belief in the company's superior prospects [4] - The funding for the North Dakota data center is a strategic move to expand Applied Digital's data center footprint and improve service offerings [5] - The strong revenue growth and continued support from Nvidia position Applied Digital favorably for future opportunities [6]

Sumitomo Mitsui Banking Corporation ("SMBC") leads a $375 million financing for the Company's Ellendale High Performance Computing ("HPC") data center campus (the "Ellendale HPC Campus")Provides further validation of the Ellendale HPC Campus through a partnership with one of the world's leading data center financing platforms DALLAS, Feb. 12, 2025 (GLOBE NEWSWIRE) -- Applied Digital Corporation (Nasdaq: APLD) ("Applied Digital" or the "Company"), a designer, builder, and operator of next-generation digital ...

Core Viewpoint - The market reaction to DeepSeek's AI chatbot announcement reflects a misunderstanding of the AI industry's technological and capital requirements, presenting potential investment opportunities for long-term investors [3][12]. Group 1: Market Reaction - DeepSeek's launch of a competitive chatbot led to a significant sell-off in Nvidia shares, which fell 17%, resulting in a loss of nearly $600 billion in market value, marking the largest single-day loss for any public company [1]. - The broader tech sector experienced a decline of approximately $1 trillion in value as investors feared reduced demand for premium chips in future AI developments [2]. Group 2: Investment Opportunities - SoundHound AI's shares dropped 11.2% following DeepSeek's announcement, creating an attractive entry point for investors due to its unique technology and business model that differs from large language models [5][6]. - Applied Digital's stock fell 27.7%, but the company is positioned to address the critical power needs of next-generation data centers, with projections indicating a 36GW power shortfall by 2028 [7][8]. - Taiwan Semiconductor Manufacturing Company (TSMC) saw a 13.3% decline in shares, yet it maintains a 65% market share in global foundry revenue and is essential for both AI development and broader semiconductor innovation [9][10][11]. Group 3: Long-term Perspectives - The current market pullback offers compelling entry points across various technology segments, focusing on companies that provide unique value to the AI ecosystem, such as SoundHound, Applied Digital, and TSMC [12][13].

Group 1: AI Market Overview - The AI revolution, initiated by ChatGPT in late 2022, has led to significant returns for early investors in companies like Nvidia, Microsoft, and Broadcom [1] - McKinsey & Co. estimates that generative AI could generate up to $4.4 trillion in annual value across 63 use cases, with potential to double when considering broader software integration [2] - The focus is shifting from initial AI stocks to a new generation of innovators in software and robotics [3] Group 2: Company Highlights - SoundHound AI is a leading player in the voice AI market, with technology supporting voice experiences in 25 languages and a backlog exceeding $1 billion [5] - SoundHound's revenue doubled year-over-year to $25.1 million in Q3 2024, with projected growth exceeding 90% [6] - Serve Robotics, spun off from Uber, has achieved a 99.94% reliability rate in deliveries and has raised $167 million in 2024 to scale its operations [7][8] - Serve Robotics aims to target delivery costs of $1 per trip in a market projected to reach $450 billion by 2030 [9] - Applied Digital is addressing the increasing power demands of AI, having secured up to 600 megawatts of power capacity in North Dakota [10][11] - Applied Digital raised $450 million through convertible notes and $160 million from investors, positioning itself to benefit from the projected 125% surge in data center power consumption by 2030 [11] Group 3: Future Outlook - The next wave of AI development will likely be driven by specialized companies like SoundHound, Serve Robotics, and Applied Digital, each addressing unique market needs [12] - These companies are well-positioned with proven technology, strong partnerships, and access to large addressable markets, presenting investment opportunities beyond established tech giants [12]

Applied Digital Corporation (APLD) shares have appreciated 6.3% in the past week, outperforming the broader Finance sector’s return of 1.3%. This builder and operator of next-generation digital infrastructure designed for High-Performance Computing (HPC) applications, cloud services, and data center hosting has been benefiting from strong top-line growth.In its recently concluded second-quarter fiscal 2025, revenues jumped 51% year over year to $63.9 million, driven by strong contributions from Cloud Servic ...

Applied Digital (APLD) reported a second-quarter fiscal 2025 loss of 66 cents per share, missing the Zacks Consensus Estimate of a loss of 14 cents. The company reported a loss of 10 cents per share in the year-ago quarter.Adjusting for loss on conversion of debt ($25.4 million), loss on change in fair value of debt ($87.2 million), diligence, acquisition, disposition, integration expenses, and litigation expenses ($9.5 million) and stock compensation ($3.5 million), the non-GAAP loss was 6 cents per share, ...

Core Insights - The AI revolution is projected to significantly reshape the global economy, with generative AI potentially adding between $2.6 trillion and $4.4 trillion in annual value across various use cases [1] - Market valuations are reflecting this transformation, particularly for tech giants focused on AI, with Nvidia delivering over 2,000% returns to shareholders in five years [2] Company Summaries - **Applied Digital Corporation** is transforming high-performance computing with a $5 billion funding partnership aimed at expanding its digital infrastructure, including a $900 million investment for a 400-megawatt facility to meet AI processing demands [3][4] - **Serve Robotics Inc.** is innovating in autonomous delivery with a third-generation robotics platform powered by Nvidia, and plans to deploy 2,000 new units in partnership with Uber, positioning itself for significant market share [5][6] - **Oklo Inc.** is developing next-generation nuclear solutions to meet the energy demands of AI infrastructure, with a partnership to supply 12 gigawatts of clean power, supported by regulatory approvals and commercial partnerships [7][8] - **Alphabet Inc.** is enhancing its AI capabilities in retail through autonomous AI agents that improve product searches and customer interactions, leveraging partnerships with e-commerce platforms to extend its reach [9][10] - **Tesla Inc.** is pursuing a comprehensive AI strategy with investments in custom AI chips and robotics, creating competitive advantages through vertical integration and extensive real-world data [11][12] Industry Overview - The AI revolution represents a significant investment opportunity, with companies across the AI value chain offering exposure to core infrastructure, practical applications, and enabling technologies, making them attractive for investors [13]

Providing alpha-generating investment ideas. I am an independent investor managing my family's portfolio, primarily via a Self Managed Super Fund. You can expect my articles to deliver a clearly structured, evidence-based thesis. But first and foremost, I encourage readers to judge me on my performance.I have a generalist approach as I explore, analyze and invest in any sector so long there is perceived alpha potential vs the S&P500. The typical holding period ranges between a few quarters to multiple years ...