Geopolitical Developments - The U.S. launched a military strike on Venezuela, extracting President Nicolás Maduro to face criminal charges in the U.S. [2] - President Trump stated that the U.S. would "run" Venezuela until an orderly transition is possible and that U.S. oil companies would rebuild Venezuela's oil infrastructure [2][3] Market Reactions - Investors are expected to closely monitor developments in Venezuela and seek more details from the Trump administration, particularly regarding the oil market, which may experience volatility [3] Employment and Economic Data - The Bureau of Labor Statistics is set to release the December jobs report, which could influence interest rates [6] - Federal Reserve officials indicated that a weakening labor market might lead to more interest rate cuts, with upcoming reports on job openings, private sector hiring, and jobless claims providing insights into the labor market [7] Corporate Earnings Reports - Applied Digital, a data center operator, will report on the AI industry, with investors looking for signals of strong AI spending [9] - Constellation Brands, Tilray Brands, Albertsons Companies, CalMaine Foods, and Simply Good Foods are among the companies reporting earnings this week, providing insights into consumer spending levels [10][11]

Core Viewpoint - The stock of Applied Digital has significantly benefited from the ongoing investment cycle in AI data centers, showcasing remarkable growth and potential for future revenue increases [1][2]. Group 1: Company Overview - Applied Digital specializes in designing, building, and operating high-performance data centers that cater to heavy GPU workloads [4]. - The company initially focused on blockchain applications but pivoted to AI workloads in 2023, leading to substantial revenue growth [5]. Group 2: Financial Performance - Since the beginning of 2023, Applied Digital's stock has surged by 1,200%, with analysts projecting revenues of $552 million in 2026, an 86% increase from the estimated $297 million in 2025 [2][8]. - The company is currently experiencing a boom in data center spending, with total data center capacity demand expected to increase by nearly 300% by 2030 [7]. Group 3: Capital Expenditures and Debt - Applied Digital is heavily investing in building data centers, leading to significant capital expenditures and an increase in long-term debt, which currently stands at approximately $700 million [11]. - The company has increased its share count by 196% over the past three years, raising concerns about share dilution and the sustainability of its financial model [11]. Group 4: Market Position and Valuation - The current market capitalization of Applied Digital is approximately $7.9 billion, with a price-to-sales ratio nearing 13 times the 2026 revenue estimates, indicating a potentially high valuation relative to its revenue growth [12][13]. - The company is currently incurring cash losses, which raises questions about its long-term profitability and the feasibility of its growth strategy [14].

Economic Data Release - The week will begin with ISM Manufacturing PMI and ISM Manufacturing Prices data for December on Monday [2] - S&P Global Services PMI and ISM Non-Manufacturing PMI for December will be released on Tuesday [2] - JOLTS Job Openings for November and ADP Nonfarm Employment numbers for December are scheduled for Wednesday [2] - Initial Jobless Claims data will be released on Thursday [2] - Nonfarm Payrolls and unemployment numbers for December are due on Friday [2] Earnings Reports - Constellation Brands, Marks & Spencer, Albertsons, and Applied Digital will report their earnings on Wednesday [3][4] - Tesco PLC is set to report earnings on Thursday [4] Market Events - The CES conference in Las Vegas will focus on AI, robotics, digital health, and mobility, featuring keynote speeches from Nvidia CEO Jensen Huang [5] - IREN Limited and GameStop are expected to experience volatility based on options volume [4] - The analyst quiet period will expire for Lumexa, Wealthfront, JM Group, and Cardinal Infrastructure, allowing analysts to post ratings [4]

Core Insights - Applied Digital Corporation (NASDAQ: APLD) is recognized as one of the best AI stocks to buy under $50, focusing on next-generation digital infrastructure for HPC and AI workloads [1] - The company has entered into a loan facility with Macquarie Group to fund pre-lease development costs for new data center projects [1][2] - APLD is in advanced negotiations with an investment-grade hyperscaler for multiple campuses and plans to draw an initial $100 million from the loan facility [2] - The financing is aimed at supporting the development of purpose-built campuses for hyperscale customers as demand for AI-optimized data center infrastructure grows [3] - APLD plans to spin off Applied Digital Cloud through a merger with EKSO Bionics Holdings Inc., creating a new company called ChronoScale focused on AI workloads [4] - Analysts have a consensus Buy rating on APLD, with an average price target of $40.50, indicating a potential upside of 68.40%, and a Street-high target of $56, suggesting an upside of 132.85% [5]

We recently published 10 Stocks Powering Into 2026 With Explosive Gains. Applied Digital Corporation (NASDAQ:APLD) is one of the top performers on Friday. Applied Digital rallied for a second day on Friday, surging 14.64 percent to close at $28.11 apiece as investors poured funds back into artificial intelligence players despite the lack of fresh catalysts to spark buying appetite. In recent news, Applied Digital Corporation (NASDAQ:APLD) successfully spun off its cloud computing and data center businesses ...

Core Insights - Applied Digital's revenue increased significantly from $8.5 million in fiscal 2022 to $144.2 million in fiscal 2025, excluding its cloud business [1] - The company is spinning out its cloud business, Sai, to merge with EKSO Bionics Holdings, forming a new entity called ChronoScale, while retaining a 97% ownership [2] - Despite rapid growth, Sai was unprofitable and conflicted with Applied Digital's strategy to evolve into a stable REIT [3] Business Model - Applied Digital operates data centers, leasing them to companies that install their own servers, initially focusing on Bitcoin miners before pivoting to cloud, HPC, and AI markets in 2022 [5] - The company launched a subsidiary, Sai Computing, in 2023 to offer cloud-based AI services using Nvidia's latest GPUs [4] Financial Performance - The stock price surged over 270% in the past year, driven by growth, new lease agreements, and the planned transformation into a REIT [7] - However, net losses widened from $23.5 million in fiscal 2022 to $233.7 million in fiscal 2025 due to expansion and increased GPU purchases [8] Expansion Plans - Applied Digital is expanding its Polaris Forge 1 campus, with a new 100 MW AI/HPC data center completed and plans for additional 150 MW buildings [9] - The company has contracted approximately $16 billion in lease payments over the next 15 years, primarily from CoreWeave, indicating strong demand for its data centers [10] Market Outlook - Analysts expect revenue for fiscal 2026 to rise by 38% to $297.3 million, with a narrowed net loss of $91.1 million, although current estimates may be unreliable due to the inclusion of the cloud business [11] - The potential for over $1 billion in annual revenues exists after campus expansions, but profitability may take two to three years [12] Valuation Considerations - Applied Digital's stock may experience moderate growth in the next year, but it is not yet a stable income-generating REIT like Digital Realty and Equinix [14] - Analysts may lower near-term estimates following the spin-off of ChronoScale, suggesting a cautious approach to investment [15]

Core Viewpoint - Applied Digital Corporation is expected to report a quarterly loss of 22 cents per share for Q2 2026, compared to a loss of 6 cents per share a year ago, with projected revenue of $82.22 million, up from $63.87 million the previous year [1] Group 1: Earnings Expectations - The company will release its earnings results for Q2 2026 on January 7, 2026 [1] - Analysts predict a quarterly loss of 22 cents per share, a significant increase from the previous year's loss of 6 cents per share [1] - The consensus estimate for quarterly revenue is $82.22 million, reflecting a year-over-year increase from $63.87 million [1] Group 2: Business Developments - On December 29, 2025, the company announced plans to spin out its cloud business and proposed a business combination with EKSO to launch ChronoScale [2] - Following this announcement, Applied Digital shares increased by 1.8%, closing at $24.52 [2] Group 3: Analyst Ratings - Northland Capital Markets analyst Mike Grondahi maintained an Outperform rating with a price target of $40 [4] - Lake Street analyst Rob Brown maintained a Buy rating with a price target of $45 [4] - Needham analyst John Todaro maintained a Buy rating with a price target of $41 [4] - Craig-Hallum analyst George Sutton raised the price target from $37 to $39 while maintaining a Buy rating [4] - HC Wainwright & Co. analyst Kevin Dede raised the price target from $20 to $40 while maintaining a Buy rating [4]

Airbus confirmed on Friday it would issue audited end-year commercial data on Jan 12 in an apparent sign of confidence in its recently revised target of "around 790" deliveries. ...

Core Viewpoint - Bitcoin has surpassed $88,000, leading to a rise in certain cryptocurrency mining stocks [1] Group 1: Company Performance - TeraWulf (WULF.US) has seen an increase of nearly 5% [1] - Applied Digital (APLD.US) has risen by over 3% [1] - Cipher Mining (CIFR.US) has gained more than 1.7% [1]

Core Insights - Applied Digital (APLD) announced a strategic spinoff to enhance its position in the AI infrastructure market by merging its cloud computing division with EKSO Bionics Holdings to form ChronoScale Corporation, which will focus on AI workloads [1][3] Company Developments - The transaction structure allows Applied Digital to retain approximately 97% ownership of the new entity, enabling it to spin out its cloud business while maintaining significant control [2] - ChronoScale will serve as a standalone platform for GPU-intensive AI training and inference workloads, allowing both Applied Digital and ChronoScale to pursue independent growth strategies with increased capital flexibility [3] Financial Performance - Applied Digital's market capitalization is currently valued at $6.88 billion, with its stock price having more than tripled in the past year, although it is down nearly 40% from its 52-week high [4] - The company is transitioning from a cryptocurrency mining operation to a key player in the AI infrastructure sector, having secured billions in long-term contracts that provide revenue visibility [5] Infrastructure Development - The flagship data center, Polaris Forge 1, is a 400-megawatt facility leased to CoreWeave under a 15-year agreement valued at approximately $11 billion, with a subsequent $5 billion deal for Polaris Forge 2 with an unnamed investment-grade hyperscaler customer [6] - Applied Digital is constructing data centers in North Dakota, where electricity costs are 24% below the national average, which is advantageous given the high power consumption of AI queries compared to traditional internet searches [7]