Applied Digital Stock Soars After Q1 Revenue Nearly Doubles
The data center operator beats analyst estimates, signaling strong demand for its high-performance computing (HPC) and AI cloud services.
Shares of Applied Digital Corporation (NASDAQ: APLD) surged in premarket trading after the company posted fiscal first-quarter results that significantly surpassed analyst expectations. The company, which specializes in high-performance computing (HPC) data centers, saw its revenue jump 84% year-over-year, reflecting robust demand for digital infrastructure tailored for artificial intelligence.
For the quarter ending August 31, Applied Digital , handily beating consensus estimates of approximately $52 million. The company posted a smaller-than-expected adjusted loss of $0.03 per share, a notable improvement from the anticipated loss of $0.13 to $0.16 per share. The strong performance triggered a bullish response from investors, with the stock indicated to open around 25% higher.
Applied Digital's growth is closely tied to the expanding need for specialized data centers capable of supporting the immense computational demands of AI and other HPC applications. The global HPC market is on a steep growth trajectory, with projections suggesting it could , driven by the proliferation of AI and big data analytics.
Operationally, the company has been making significant strides. During the quarter, Applied Digital fully energized its 180-megawatt hosting facility in North Dakota and began deploying GPUs for its first Cloud Services customer. "Our outstanding results this quarter demonstrate our ability to execute on our plan to rapidly build out our data center campuses and meet the surging demand for HPC infrastructure," said Wes Cummins, CEO of Applied Digital, in the company's earnings release.
The positive earnings report provides a strong tailwind for Applied Digital as it continues to build out its capacity, aiming for a total of 500 MW across its three hosting facilities. The results position the company as a key player in the build-out of next-generation digital infrastructure, capitalizing on the secular growth trends in the . As businesses across sectors integrate AI into their operations, the demand for the specialized, high-power data centers that Applied Digital provides is expected to continue its upward trend.