1. Applied Digital Corp. (NASDAQ:APLD)
Market Capitalization as of September 11: $924.17 million
Number of Hedge Fund Holders: 29
Applied Digital Corp. (NASDAQ:APLD) is a technology company that specializes in providing digital infrastructure solutions and cloud services, focused on building and operating data centers. It aims to use its expertise in data center infrastructure and energy management to support the growing demand for digital assets and HPC services.
There were 29 hedge funds long in Applied Digital Corp. (NASDAQ:APLD) in the second quarter, with a total stake value of $176.2 million.
Revenue for fiscal Q4 2024 surged to $43.7 million from $22 million in fiscal Q4 2023, driven by increased data center capacity and cloud services. This revenue was up 98.29% year-over-year. Data center hosting generated $26.9 million, while cloud services contributed $16.8 million. However, there was still a loss per share of $0.52.
The cost of revenue rose to $46.3 million from $15.9 million due to higher energy costs (from increased megawatt usage), depreciation/amortization, and personnel expenses related to business growth.
Applied Digital Corp. (NASDAQ:APLD) has made substantial progress towards securing a lease agreement with a Fortune 500 company which will stretch over a decade for its Ellendale campus. HPC data centers are expanding, with 400 megawatts under development and a new 100-megawatt facility in Ellendale nearing completion. It’s marketing additional campuses totaling 1.4 gigawatts, all with power available in 2026.
There were, however, challenges due to power outages at our Ellendale facility, which caused the loss per share mentioned earlier. The company has replaced transformers and now has 286 megawatts of capacity for blockchain clients across North Dakota locations.
Despite recent challenges, the company remains optimistic, while focusing on long-term growth. It made strides in cloud services secured a major hyperscaler partnership for its Ellendale data center and has a clear vision for expanding its HPC data center portfolio. With ongoing development, it’s well-positioned for success.
While we acknowledge the growth potential of Applied Digital Corp. (NASDAQ:APLD), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
