Applied Digital Stock Surges on Strong Earnings and AI Demand
Shares of Applied Digital (APLD) jumped 7% on Monday, buoyed by a bullish earnings report and rising interest in AI infrastructure. The company posted $64.2 million in revenue, surpassing Wall Street's $50 million estimate—an 84% year-over-year increase. Demand for AI computation resources continues to drive growth, highlighted by an $11 billion cloud computing deal.
Despite the optimism, risks loom. Applied Digital carries significant debt and faces funding challenges for its data center expansion. High interest rates or shareholder dilution may be necessary to finance future projects. The AI data center market offers substantial potential, but investors should weigh the volatility carefully.