Applied Digital Surges 31% on CoreWeave Deal and Earnings Beat

Applied Digital (APLD) shares surged 31% to $13.14 on Thursday, driven by its Q4 earnings report and a major expansion of its lease agreement with AI hyperscaler CoreWeave. The company's revenue rose 41% YoY to $38 million, beating expectations, and CoreWeave exercised a 150-MW lease option, boosting contracted capacity to 400 MW. CEO Wes Cummins reiterated plans to generate $1 billion in annual NOI within 3-5 years. The stock broke above recent resistance levels and is now up sharply year-to-date.

Applied Digital Corporation (APLD) shares surged 31% to $13.14 on Thursday, driven by its Q4 earnings report and a major expansion of its lease agreement with AI hyperscaler CoreWeave. The company's revenue rose 41% year-over-year (YoY) to $38.01 million, beating expectations [1]. CoreWeave exercised a 150-MW lease option, boosting contracted capacity to 400 MW [2]. CEO Wes Cummins reiterated plans to generate $1 billion in annual net operating income (NOI) within 3-5 years. The stock broke above recent resistance levels and is now up sharply year-to-date.

The Q4 report showed that Applied Digital's revenue from its Data Center Hosting Business, which provides space for crypto mining customers, remained robust. The company's 106 megawatt and 180 megawatt facilities in North Dakota were operating at full capacity [2]. Bitcoin (CRYPTO: BTC) prices hitting all-time highs contributed to the demand for these services.

The company reported a loss of $0.03 per share, beating a Street consensus estimate of a loss of $0.15 per share [1]. Full fiscal year revenue was $144.2 million for the company, up 6% YoY, with an adjusted loss of $0.06 per share for the full fiscal year [2].

The major expansion of the lease agreement with CoreWeave is expected to generate around $11 billion in contracted revenue over the 15-year lease terms [2]. The first 100 megawatt facility is scheduled to be operational in the fourth quarter of 2025, with the second 150 megawatt facility up in mid-2026 and a third 150 megawatt facility in 2027 [3]. Cummins expressed confidence in the company's multi-gigawatt pipeline and its ability to position itself well for future projects.

Investors should keep an eye on the company's earnings outlook and the industry's overall performance. The Zacks Rank #2 (Buy) for the stock suggests that the shares are expected to outperform the market in the near future [1]. The current consensus EPS estimate for the coming quarter is -$0.09 on $58.45 million in revenues, and for the current fiscal year, it is -$0.33 on $230.84 million in revenues [1].

References:
[1] https://finance.yahoo.com/news/applied-digital-corporation-apld-reports-221502476.html
[2] https://www.inkl.com/news/applied-digital-stock-soars-after-q4-results-how-coreweave-bitcoin-are-helping
[3] https://finance.yahoo.com/news/applied-digital-apld-announced-signing-185304463.html