Core Insights - Applied Digital stock is expected to rise significantly following the release of its upcoming quarterly report, having already seen a remarkable 215% increase in 2025 due to high demand for AI infrastructure [1][3] - The company is positioned in the AI infrastructure boom, focusing on designing and operating data centers for high-performance computing and AI workloads, leading to rapid revenue growth [2] Financial Performance - Applied Digital has consistently outperformed Wall Street's earnings expectations, reporting smaller losses than anticipated, driven by strong revenue growth [5] - In the first quarter of fiscal 2026, revenue increased by 84% year-over-year to $64 million, surpassing the $50 million consensus estimate, aided by a significant contract with CoreWeave [6] - The company has completed the fit-out of 100 megawatts (MW) of HPC hosting capacity for CoreWeave, with a 15-year lease contract expected to contribute $11 billion to revenue over its lifetime [7] Future Projections - Analysts forecast a 29% year-over-year revenue increase to $82.2 million for the recently concluded fiscal Q2, with expectations that Applied Digital will exceed these estimates [9] - The stock is currently trading at a high valuation of nearly 33 times sales, but the company's growth potential and revenue pipeline justify this valuation [10] - If Applied Digital achieves the projected $970 million revenue in the coming years and trades at a discounted 10 times sales, its market cap could increase by 44% to $9.7 billion [12] Investment Consideration - The current pullback in stock price presents a potential buying opportunity, as the company is poised for significant growth following its upcoming results [13]

Group 1 - Applied Digital Corp. (NASDAQ: APLD) experienced a significant increase of 16.88% week-on-week as investors anticipated its second-quarter fiscal year 2026 earnings results [1] - The company is set to release its financial and operational highlights after market close on January 7, with a conference call planned to discuss the results [2] - Applied Digital has initiated a restructuring process, creating two separate entities for its cloud computing and data center businesses [3] Group 2 - The restructuring strategy includes a merger with EKSO Bionics Holdings Inc., which will be renamed ChronoScale, focusing on an accelerated compute platform for AI workloads [4] - Following the merger, Applied Digital will own 97% of the combined firm, while EKSO Bionics will seek potential buyers for its business and assets [4] - The proposed transaction aims to establish a focused platform to meet the growing demand for GPU-accelerated cloud infrastructure in a capacity-constrained market [5]

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. ...