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2 Brilliant Stocks to Profit from the AI Infrastructure Boom
The Motley Fool· 2025-06-26 08:05
Core Insights - The global technology infrastructure is undergoing significant development, particularly in artificial intelligence (AI), leading to a substantial increase in data center construction [1] - The data center construction market is projected to grow from $240 billion in 2024 to $456 billion by 2030, while the AI server market could increase to $430 billion by 2033 [1] Company Analysis: Applied Digital - Applied Digital is a small company with $221 million in trailing-12-month revenue and a market cap of $2.2 billion, focusing on building and operating data centers [4] - The company has 286 megawatts of capacity for crypto mining at two locations in North Dakota, currently operating at full capacity [5] - Although not yet profitable, Applied Digital is expected to achieve profitability as new facilities open and revenue increases, with a new facility in Ellendale, North Dakota, scheduled for Q4 2025 [6] - A partnership with Macquarie Asset Management involves an investment of up to $5 billion to expand its Ellendale campus, allowing for over 2 gigawatts of data center capacity [7] - The potential sale of its cloud hosting business, which constitutes a third of its revenue, could enable Applied Digital to focus on its data center business and possibly transition to a data center real estate investment trust (REIT) [8] - Revenue grew by 22% year over year in Q1, indicating a positive outlook for the company [8] Company Analysis: Dell Technologies - Dell Technologies is a leading supplier of servers globally, with its server business expected to surpass its PC business in the coming years [9] - Revenue from infrastructure solutions, including AI-optimized servers, grew by 12% year over year in Q1, making up 44% of total revenue [10] - The server and networking revenue increased by 16%, with segment operating income rising by 36% compared to the previous year [10] - Order bookings for AI servers reached $12 billion last quarter, exceeding all shipments from the previous fiscal year, with a backlog of $14.4 billion [11] - Despite a total revenue growth of only 5% year over year, improving margins in the infrastructure segment led to a 17% increase in earnings per share [13] - The stock trades at a forward price-to-earnings (P/E) multiple of around 12.5, reflecting sluggish growth in the PC business but indicating potential for higher returns as the infrastructure business expands [12][14]
APLD: A Turnaround in Profitability or Mirage Behind Adjusted EBITDA?
ZACKS· 2025-06-24 13:21
Core Insights - Applied Digital's fiscal Q3 2025 results show a significant 878% year-over-year increase in adjusted EBITDA to $10 million, indicating operational strength, but a net loss of $36.1 million or 16 cents per share raises concerns about profitability and capital structure [1][9] - The company reported a 22% increase in revenue to $52.9 million, but this fell short of expectations by nearly $10 million due to operational issues in transitioning GPU clusters and seasonal margin pressures in the Data Center Hosting segment [2][9] Strategic Developments - Applied Digital secured a $5 billion capital commitment from Macquarie and a $375 million loan from SMBC, enhancing liquidity for its Ellendale campus expansion [3] - The company is reviewing strategic alternatives for its AI Cloud Services business, considering potential benefits from a REIT conversion and conflicts with hyperscaler leasing prospects [3][4] Financial Position - The company's debt has risen to $689.1 million, leading to increased interest expenses, prompting investors to question the sustainability of its growth and reliance on adjusted metrics [4] - The Zacks Consensus Estimate for fiscal 2026 earnings suggests a 73.6% year-over-year increase, with current estimates indicating a net loss of $0.99 per share for the current year [13][14] Market Performance - APLD shares have increased by 29.2% year-to-date, contrasting with a 3.7% decline in the industry [8] - The company's forward price-to-sales ratio stands at 8.97X, significantly above the industry average and its five-year median of 1.44X, reflecting a Value Score of F [11]
Applied Digital: Now the High-Stakes Race to Build Begins
MarketBeat· 2025-06-17 17:02
Applied Digital TodayAPLDApplied Digital$11.10 -0.45 (-3.90%) 52-Week Range$3.01▼$15.42Price Target$12.73Add to WatchlistThe artificial intelligence (AI) revolution has ignited a modern gold rush, not for precious metals, but for the vast digital infrastructure required to power it. In this high-stakes environment, Applied Digital Corporation NASDAQ: APLD has made a bold pivot to position itself as a key contender. This strategic shift has captivated investors, fueling significant stock price volatility an ...
$2.7 Billion in Data Center Savings: New Applied Digital Report Positions North Dakota as the Epicenter for AI Infrastructure
Globenewswire· 2025-06-17 12:05
Core Insights - The article discusses the launch of a white paper by Applied Digital Corporation, detailing how smart site selection and cooling design can significantly reduce costs for generative AI infrastructure, potentially saving up to $60 million annually per campus [1][8]. Group 1: Company Overview - Applied Digital Corporation specializes in designing, building, and operating next-generation digital infrastructure for High-Performance Computing (HPC) applications [1]. - The company has introduced Polaris Forge as its North Dakota-based data center region, which is optimized for AI workloads and driven by renewable power [2]. Group 2: Key Findings from the White Paper - The white paper highlights that site selection can lead to annual electricity cost reductions of $50 to $60 million compared to existing 100MW data centers, amounting to potential savings of up to $2.7 billion over a 30-year lifespan [8]. - Polaris Forge 01 is designed to support 400 MW of critical IT load and is built to take advantage of stranded power and favorable climate conditions for cooling [4][8]. Group 3: Infrastructure and Community Impact - The design of Polaris Forge 01 includes a closed-loop, waterless, direct-to-chip cooling system, achieving a projected Power Usage Effectiveness (PUE) of 1.18 and a Water Usage Effectiveness (WUE) near zero [8]. - The company is committed to supporting local economies through initiatives that integrate community priorities, such as workforce housing and job creation [5]. Group 4: Market Confidence and Agreements - Applied Digital has signed a 250 MW, 15-year lease agreement worth $7 billion with CoreWeave for deployment at Polaris Forge 01, indicating strong market confidence in the company's capabilities [6].
Applied Digital (APLD) Earnings Call Presentation
2025-06-17 09:31
High-Performance Infrastructure at Scale Applied Digital Investor Presentation March 2025 This presentation has been designed to provide general information about Applied Digital Corporation ("Applied Digital" or the "Company"). Any information contained or referenced herein is suitable only as an introduction to the Company. The information contained in this presentation is for informational purposes only. The information contained herein does not constitute or form a part of, and should not be construed a ...
Applied Digital's Cloud Services Business Divestment Looks Promising
ZACKS· 2025-06-16 14:16
Core Insights - Applied Digital (APLD) plans to divest its cloud services division, which constitutes about one-third of its FY2025 revenues, to focus on becoming a pure-play data center REIT [1][8] - The divestiture aims to resolve customer conflicts with hyperscale clients and enhance market positioning for its primary leasing business [1][4] Financial Performance - APLD's cloud revenues dropped by 32-36% quarterly, leading to a revenue miss of $52.9 million compared to the estimated $64 million, which negatively impacted stock performance [2][8] - Despite cloud challenges, APLD secured significant deals, including a $7 billion, 15-year lease with CoreWeave and a nearly $5 billion investment from Macquarie, indicating strong demand for its HPC infrastructure [3][4] Strategic Moves - The sale of the cloud unit is seen as a corrective measure to streamline operations for a REIT transition and to stabilize balance sheets while unlocking long-term shareholder value [4] - APLD's stock has increased by 46.3% year-to-date, contrasting with a 6.8% decline in the industry [7] Valuation Metrics - APLD trades at a forward price-to-earnings ratio of 10.44, which is above the industry average and its five-year median of 1.43, indicating a potentially overvalued position [9] - The Zacks Consensus Estimate for APLD's fiscal 2026 earnings suggests a significant year-over-year increase of 73.6% [10]
APLD Doubles Down on AI/ML Hosting With Landmark CoreWeave Lease
ZACKS· 2025-06-10 16:11
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]
Prediction: 2 AI Stocks That Will Be Worth More Than C3.ai 2 Years From Now
The Motley Fool· 2025-06-08 08:10
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]
Why Applied Digital Stock Soared Again Today
The Motley Fool· 2025-06-06 23:10
Applied Digital (APLD 8.57%) stock posted another day of big gains in Friday's trading. The company's share price closed out the daily session up 8.5%. The S&P 500 ended the day up 1%, and the Nasdaq Composite closed the session up 1.2%.Applied Digital stock continued to rocket higher today after the latest jobs report for the Bureau of Labor Statistics (BLS) got a bullish read from investors. The company's share price has now more than doubled over the last week of trading. May's jobs data served up a bul ...
APLD Accelerates Hyperscale Growth With $5B Expansion Backing
ZACKS· 2025-06-06 14:21
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]