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3 Artificial Intelligence Stocks No One Is Talking About but They Should Be
APLDApplied Digital (APLD) The Motley Fool·2024-10-21 12:53

AI Industry Overview - Artificial intelligence (AI) is transforming industries and creating massive economic opportunities, with AI spending projected to have a 19.9trillionglobaleconomicimpactby2030[1]−TheAIboomisaccelerating,leadinginvestorstoseekhiddengemsintheAIspacebeyondtheusualsuspects[1]NavitasSemiconductor(NVTS)−NavitasSemiconductorisattheforefrontofnext−generationpowersolutionscriticalforenergy−efficientAIdatacenters,utilizingGaN(galliumnitride)andSiC(siliconcarbide)powersemiconductors[2]−Thecompany′s"IntelliWeave"digitalcontroltechniqueenablesAIdatacenterpowersuppliestoachieveover9919.9 trillion global economic impact by 2030 [1] - The AI boom is accelerating, leading investors to seek hidden gems in the AI space beyond the usual suspects [1] Navitas Semiconductor (NVTS) - Navitas Semiconductor is at the forefront of next-generation power solutions critical for energy-efficient AI data centers, utilizing GaN (gallium nitride) and SiC (silicon carbide) power semiconductors [2] - The company's "IntelliWeave" digital control technique enables AI data center power supplies to achieve over 99% efficiency, potentially revolutionizing power consumption in AI applications [2] - Navitas reported Q2 2024 revenue of 20.5 million, a 13% year-over-year increase, with a growing pipeline of over 60 data center customer projects and new products tailored for AI applications [3] Applied Digital (APLD) - Applied Digital is expanding its high-performance computing infrastructure to meet the booming demand for AI processing power, focusing on next-generation data centers optimized for AI and machine learning [4] - The company's cloud services business generated 25.9millioninrevenueinthemostrecentquarter,withtwonewGPUclustersadded[5]−AppliedDigitalisdevelopinga100MWhigh−performancecomputingfacilityinNorthDakota,withplanstoexpandtotalcapacityto400MW,andisinthedesignphasefortwoadditionalbuildingsatthesite[5]−Thecompanyraised25.9 million in revenue in the most recent quarter, with two new GPU clusters added [5] - Applied Digital is developing a 100 MW high-performance computing facility in North Dakota, with plans to expand total capacity to 400 MW, and is in the design phase for two additional buildings at the site [5] - The company raised 160 million in a private placement, including investments from Nvidia and Related Companies, and reported a 67% year-over-year revenue increase to 60.7millioninfiscalQ12025[6]IrisEnergy(IREN)−IrisEnergyisleveragingitsBitcoinmininginfrastructureexpertisetocapitalizeonthegrowingdemandforAIcomputingpower,generating60.7 million in fiscal Q1 2025 [6] Iris Energy (IREN) - Iris Energy is leveraging its Bitcoin mining infrastructure expertise to capitalize on the growing demand for AI computing power, generating 3.1 million in revenue from AI cloud services in fiscal year 2024 [7] - The company is evaluating AI data center opportunities for its 1.4 GW West Texas site, managed by Morgan Stanley [7] - Iris Energy reported improved financial results for fiscal year 2024, with EBITDA of 19.6millioncomparedtoalossof19.6 million compared to a loss of 123.2 million in the previous year, and Bitcoin mining revenue reaching a record 184.1million,upfrom184.1 million, up from 75.5 million in fiscal year 2023 [8] Summary of AI Companies - Navitas Semiconductor, Applied Digital, and Iris Energy offer unique angles on the AI revolution, with potential to benefit from the ongoing technological transformation [9] - These companies are currently unprofitable and face intense competition, but their success depends on the continued growth and adoption of AI technologies [9]