Remember when everyone said AI was just hype? Well, tell that to Applied Digital (NASDAQ: APLD) shareholders who watched their stock absolutely launch 28% on Friday morning. We’re talking about a company that’s now up a mind-melting 372% this year. Yeah, you read that right.
So what’s got Wall Street’s attention? Applied Digital basically builds the digital real estate that AI needs to exist – think massive data centers where all those ChatGPT conversations actually happen. And they just dropped some numbers that made analysts reach for their calculators (and probably their blood pressure medication).
The Numbers That Made Everyone Lose Their Minds
Here’s the tea: Applied Digital pulled in $64.2 million in revenue, crushing estimates by nearly 30%. That’s an 84% jump from last year, which in finance speak means “holy cow, this thing is growing fast.”
Sure, they’re still losing money – about 11 cents per share – but here’s the kicker: analysts expected them to lose 13 cents. In the weird world of Wall Street, losing less money than expected is basically like winning the lottery.
The real story? They just signed a lease deal with CoreWeave (think of them as the landlord for AI companies) for 150 megawatts at their North Dakota campus. That’s enough power to run a small city, and it brings their total anticipated revenue for just this one campus to $11 billion. With a B.
Building the Picks and Shovels of the AI Gold Rush
CEO Wes Cummins dropped this gem: they’re positioning themselves as the “modern-day picks and shovels of the intelligence era.” Translation: while everyone’s fighting over who builds the best AI, Applied Digital is selling the infrastructure everyone needs to make it work.
Smart move, considering hyperscalers (the big tech companies) are expected to throw around $350 billion at AI deployment this year. That’s more money than most countries’ entire GDP.
They’re not stopping there either. Applied Digital is breaking ground on a second campus that’ll come online in 2026, and they’re already in “advanced discussions” with another major player to fill it up. Once both sites are locked down, they’ll have 600 megawatts of capacity across two locations.
Wall Street Goes Wild
The analyst upgrades came fast and furious. Roth Capital bumped their price target to $56 – that’s a 55% upside from current levels. Needham and Northland jumped in too, raising their targets to $41 and $40 respectively.
Here’s the thing about AI infrastructure plays: they’re not as sexy as the companies building the actual AI, but they might be smarter investments. While AI companies duke it out in an increasingly crowded market, someone’s got to keep the lights on and the servers humming.
Applied Digital seems to have figured out that in a gold rush, sometimes it pays more to sell the shovels than to dig for gold yourself. And judging by Friday’s rocket ship performance, investors are starting to get it too.