Core Insights - Applied Digital (APLD) and Sandisk (SNDK) are positioned to benefit from the rapid growth of AI-driven data infrastructure, with APLD focusing on data center development and SNDK providing high-performance NAND flash storage [1][6] Industry Overview - The global digital infrastructure market was valued at approximately $360 billion in 2025 and is projected to exceed $1.06 trillion by 2030, indicating a compound annual growth rate (CAGR) of about 24.10% [2] Applied Digital (APLD) - APLD's strategy involves building data centers in cost-effective locations, such as North Dakota, which offers inexpensive energy and favorable regulations, thus reducing operational costs [3] - APLD has secured a $5 billion, 15-year lease for 200 megawatts at Polaris Forge 2, with total contracted capacity reaching 600 megawatts and prospective lease revenues of approximately $16 billion over 15 years [4] - The company is investing in advanced liquid cooling and collaborating with Babcock & Wilcox for grid power expansion, enhancing its position in the data center ecosystem [4] - The Zacks Consensus Estimate for APLD's fiscal 2026 loss is projected at 36 cents per share, indicating an annual improvement of 55% [5] Sandisk (SNDK) - SNDK supplies NAND flash storage that meets critical AI infrastructure needs, with disciplined capacity expansion to support sustainable market growth [6] - The company’s BiCS8 technology, developed with Kioxia, enhances capacity and energy efficiency, accounting for 15% of bit shipments in the fiscal first quarter [7][8] - SNDK's data center segment grew 26% sequentially in the first quarter, with a focus on high-bandwidth flash technology for AI inference applications [9] - The Zacks Consensus Estimate for SNDK's fiscal 2026 EPS is projected at $13.46, reflecting a substantial improvement from the previous year's EPS of $2.99 [10] Price Performance and Valuation - Over the past six months, SNDK shares have increased by 894%, while APLD shares have risen by 237.2%, with SNDK's performance driven by improving earnings visibility and data center demand [11] - SNDK trades at a forward price-to-sales ratio of 5.08x, compared to APLD's 22.98x, indicating that SNDK's fundamentals are not fully reflected in its valuation [14] Conclusion - Both APLD and SNDK are positioned to benefit from AI-driven data infrastructure expansion, but SNDK's growth profile appears more balanced, with improving earnings visibility and disciplined capacity expansion [16][18]

Core Thesis - Confluent, Inc. is experiencing strong growth driven by subscription revenue and operational efficiency, positioning itself as a leader in AI-driven data infrastructure and streaming analytics [1][5]. Financial Performance - In Q3 2025, Confluent reported revenue of $298.5 million, a 19.3% increase year over year, surpassing estimates [2]. - Subscription revenue reached $286.3 million, accounting for 96% of total revenue, with Confluent Cloud growing 24% to $161 million [2]. - The Confluent Platform grew 14% to $125.4 million, supported by demand from regulated industries and hybrid deployments [3]. - International revenue surged 29% to $126.4 million, now representing 42% of total revenue [3]. - Non-GAAP operating margin improved by 340 basis points to 9.7%, with free cash flow margin at 8.2% and EPS of $0.13 beating expectations by 30% [3]. Customer Growth and Market Position - RPO increased by 43% to $1.26 billion, marking the fourth consecutive quarter of acceleration [3]. - The company has 1,487 clients with over $100K ARR and 234 clients with over $1M ARR, indicating strong large customer momentum [3]. - Flink and WarpStream showed significant growth, with 70% sequential ARR growth and 8× consumption growth, respectively [4]. - Confluent's position as a real-time "data context layer" for AI has led to adoption by over 100 AI-native customers, with AWS and MongoDB contributing 25% of new business [4]. Future Outlook - Management anticipates a minor Q4 headwind from an AI-native client shifting workloads on-prem but maintains a raised full-year guidance with FY25 revenue expected between $1.113 billion and $1.114 billion and 7% operating margins [5]. - The company is focused on healthy pipeline growth, rising profitability, and strategic momentum in AI and streaming analytics, reinforcing its role in the data infrastructure ecosystem [5].