Core Industry Insights - Applied Digital (APLD) and Vertiv Holdings (VRT) are central to the digital infrastructure expansion, driven by increasing demand for data center capacity due to AI, cloud computing, and high-performance computing workloads [2][3] - Global data center capital expenditures are projected to grow at a 21% CAGR through 2029, reaching approximately $1.2 trillion, benefiting both APLD and VRT [3] Company Performance: Applied Digital (APLD) - APLD has shifted from cryptocurrency mining to becoming a dedicated AI infrastructure provider, capitalizing on the growth of AI and machine learning workloads [5] - In Q4 fiscal 2025, APLD reported revenues of $38 million, a 41% increase year over year, and achieved positive adjusted EBITDA of $1 million [6] - APLD's partnership with CoreWeave is expected to generate around $7 billion in contracted revenue over 15 years for 250 megawatts of critical IT load [7] - The company has improved construction efficiency, reducing deployment timelines from 24 months to 12-14 months [7] - APLD's North Dakota locations provide low-cost energy and innovative cooling systems, enhancing its competitive position in the market [8] Company Performance: Vertiv Holdings (VRT) - VRT is a leading provider of thermal and power management solutions for high-density data centers, with a broad product portfolio addressing critical infrastructure needs [9] - In Q2 2025, VRT's net sales rose 35% year over year to $2.64 billion, with quarterly orders surpassing $3 billion for the first time [10][11] - VRT's strategic partnerships and acquisitions, including the $200 million acquisition of Great Lakes, enhance its capabilities in AI data center offerings [12] Stock Performance and Valuation - Year-to-date, APLD shares have increased by 95.9%, while VRT shares have appreciated by 26.5% [13] - Both companies are currently considered overvalued, with APLD trading at a forward Price/Sales ratio of 12.98X compared to VRT's 5.07X [16] - Earnings estimates show APLD's first quarter fiscal 2026 loss is expected to be 6 cents per share, improving by 33.33% over the past 30 days [19] - VRT's third-quarter 2025 earnings estimate is pegged at 98 cents per share, reflecting a 28.95% year-over-year increase [20] Conclusion - Both APLD and VRT are well-positioned to benefit from the AI-driven expansion in data center infrastructure, with APLD showing a more accelerated growth path [21][22] - VRT maintains strong growth visibility through its product portfolio and industry partnerships, but its expansion is less aggressive compared to APLD [22]

Core Insights - Nebius Group NV (NASDAQ:NBIS) is experiencing significant stock performance, with shares up 21% to $66.80, marking a potential best single-session gain ever for the company [1][2] - The company reported second-quarter earnings and revenue that exceeded estimates, with revenue increasing by 625% year-over-year [1] - DA Davidson raised its price target for NBIS from $55 to $65 following the earnings report [1] Stock Performance - NBIS shares reached a four-year high of $70.54 and are currently up 141% in 2025 [2] - Prior to the recent surge, the stock had support at its 40-day moving average [2] - There is potential for a short squeeze, with short interest increasing and 13.76 million shares sold short, accounting for 7.1% of the total available float [2] Options Activity - Call options trading is notably high, with over 208,000 contracts traded, which is seven times the average intraday volume [3] - The August 71-strike call is the most popular among options traders, indicating expectations for the stock to reclaim that level by the end of the month [3]

Core Insights - Nebius Group N.V. (NBIS) shares have increased by 57.3% over the past month, significantly outperforming the Zacks Computer & Technology sector and the Zacks Internet Software Services industry's growth of 10.1% and 10.6% respectively [1] - The company announced a private placement of $1 billion in convertible notes to enhance its global AI infrastructure and revenue opportunities by 2026, resulting in a 9.4% stock rise since the announcement [4] - Despite the recent surge, NBIS stock is still trading 22.6% below its 52-week high, closing at $39.39 [5] Revenue Growth - Nebius reported a remarkable 385% year-over-year revenue growth in Q1 2025, driven by strong demand for its AI infrastructure services [6] - The annualized run-rate revenue (ARR) saw a 700% increase, with April ARR reaching $310 million, indicating a robust start for Q2 [6][7] - The company is confident in achieving its full-year ARR guidance of $750 million to $1 billion and reaffirmed its overall revenue guidance of $500 million to $700 million for 2025 [7] AI Cloud Differentiation - To capture a larger share of the AI cloud compute market, Nebius is focusing on technical enhancements to improve reliability and reduce downtime, thereby increasing customer retention [8] - Significant upgrades to its AI cloud infrastructure have been made, including automatic recovery for failed nodes and proactive system health checks, leading to a 5% improvement in node availability for commercial use [9][10] Strategic Partnerships and Global Expansion - Nebius is strengthening its ties with NVIDIA, becoming one of the first AI cloud infrastructure platforms to offer the NVIDIA Blackwell Ultra AI Factory Platform and supporting the DGX Cloud Lepton marketplace [13] - The company is expanding its global footprint with new capacity in the U.S., Europe, and the Middle East, including a strategic data center in Israel, which helps reduce latency and diversify risk [14] Diversified Business Model - In addition to its core cloud platform, Nebius has notable offerings such as Toloka (an AI development platform), TripleTen (an edtech service), and Avride (an autonomous vehicle platform) [15] - The company holds a stake in Toloka, which is now backed by notable investors, and has partnerships with major players for Avride [16] Challenges and Financial Outlook - Despite impressive revenue growth, Nebius remains unprofitable, with adjusted EBITDA projected to be negative for the full year 2025, although management expects it to turn positive in the second half of 2025 [18] - The company has raised its 2025 capital expenditure forecast to approximately $2 billion, which could pose a concern if revenue does not keep pace [18] - Analysts have revised their earnings estimates downward for NBIS over the past 60 days, indicating potential challenges ahead [19] Valuation - Valuation-wise, NBIS is considered overvalued, reflected by a Zacks Value Score of F, with shares trading at a Price/Book ratio of 2.94X, lower than the industry average of 4 [20][21]