Applied Digital: Now the High-Stakes Race to Build Begins

Core Insights - The artificial intelligence (AI) revolution is driving demand for digital infrastructure, positioning Applied Digital Corporation as a key player in this space [1][2] - The company secured a long-term agreement with CoreWeave, which is expected to generate approximately $7 billion in revenue over 15 years [3][4] Strategic Developments - Applied Digital will lease 250 megawatts (MW) of datacenter capacity to CoreWeave at its Ellendale, North Dakota campus, with the first 100 MW facility expected to be operational by Q4 2025 [3][4] - The partnership with ABB aims to enhance power efficiency, addressing the operational complexities of AI data centers [11] Competitive Landscape - The data center market is highly competitive, with significant investments from established REITs and tech giants, creating pressure for Applied Digital to execute its projects effectively [6][7] - The company faces a high short interest of 39.55%, indicating a divided investor sentiment regarding its future performance [8][9] Financial Considerations - Applied Digital has a debt-to-equity ratio of 1.22, and a recent S-3 filing allows for potential capital raising, which may dilute existing shares [11] - The stock has a 12-month price forecast of $12.73, reflecting a potential upside of 12.53% from its current price [5] Operational Challenges - The company must meet strict construction timelines to avoid revenue impacts and maintain investor confidence [4][12] - Achieving sustained profitability will be crucial for the company's long-term success, as operational execution becomes the focus following the secured contract [12][13]