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Applied Digital finished the final phase of its Polaris Forge 1 campus by bringing an additional 75 megawatts of power capacity online. This completes the site, which now has 250 megawatts ready to host the high-density computers used for artificial intelligence.
For a company that builds the physical infrastructure for AI, finishing these projects on time is the primary way it grows. This milestone means the site is now fully operational and can begin generating the steady rental income that supports the company's massive construction spending elsewhere.
Source: GlobeNewsWire
Applied Digital is scheduled to report its quarterly results on October 7. Analysts expect the company to report a loss of about 30 cents per share on revenue of roughly 120 million dollars. For a company building massive data centers, the actual profit number matters less right now than progress on its building sites. The key thing to watch is whether its 200-megawatt campus in North Dakota remains on track to open this year, as that project is central to turning its heavy spending into steady rental income.
Applied Digital is scheduled to report its quarterly results on October 8. Analysts are looking for revenue of about 120 million dollars and a loss of roughly 30 cents per share. The most important detail for the business is the progress of its massive data center projects in North Dakota. These buildings are designed to handle the heavy power and cooling needs of artificial intelligence, and the company needs to show they are staying on schedule to meet its leasing deals.
Redburn Partners set a price target of $22 for the stock on Monday. This is notably lower than the average analyst target of $62, suggesting a much more cautious view of the company's growth than most of its peers. While Applied Digital is building massive data centers for AI, this lower target reflects the risks of such a large construction pipeline. The stock currently trades around $27, so this firm expects the price to fall as the company works through its expensive building phase.
Source: Redburn Partners
UBS started coverage of Applied Digital and four other data center firms with Buy ratings. The bank noted that these companies, which started in cryptocurrency mining, now have a significant advantage because they already have secured access to the power grid.
This access is a major bottleneck for the AI industry right now. As tech giants scramble to find enough electricity to run massive AI models, companies like Applied Digital that have "shovel-ready" sites with power already locked in are in a strong position to grow quickly.
Source: Proactive Investors
Management has missed its own profit targets for three straight quarters, showing that the high costs of building massive data centers are harder to predict than they expected.
| Expectation | |
|---|---|
| EPS | $-0.30 |
| Revenue | $116M |
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