What happened
Applied Digital (APLD +3.31%) continues to run, as the share price surged 15.1% this week as of Friday at 12:50 p.m. ET, according to data provided by S&P Global Market Intelligence. The stock had been up as much as 20.5% during the week. As of Friday at 12:50 p.m. ET, Applied Digital was trading at about $9.20 per share, up some 397% year to date.
Overall, the markets were trending higher, as the S&P 500 gained 3%, the Dow Jones Industrial Average climbed 1.6%, and the Nasdaq Composite surged 3.8% this week as of Friday at 12:50 p.m. ET.
So what
Applied Digital is a company that develops and operates data centers that provide high-performance computing services for its customers.
It has been growing significantly over the past year, as the company generated $33 million in revenue through the first three quarters of its current fiscal year, compared to $8.5 million in all the previous fiscal year.
NASDAQ: APLD
Key Data Points
The big news this week was that its data center in Jamestown, North Dakota, successfully passed the Integrated Systems Test (IST) for its first 200 KW of high-performance computing equipment and systems. The IST is the final step in ensuring that all systems meet the expected performance standards.
"This is a pivotal step for the company as we continue to build out our ultra-efficient HPC digital infrastructure," Applied Digital CEO and chairman Wes Cummins said in a press release. "This has truly been a companywide effort and reaffirms our confidence in our data centers' reliability and performance for customers."
Phases 2 and 3 of the development of the facility are underway and should be fully operational by the end of 2023.
"With the significant amount of demand we are currently seeing for this style of digital infrastructure, we expect to continue to build out our current capacity pipeline to over 200 MW," he added.
Now what
In May, Applied Digital's stock price surged after it announced that it had secured its first customer for its AI (artificial intelligence) Cloud Service business, run by subsidiary Sai Computing. The company did not disclose the name of the customer, but the agreement is worth up to $180 million over a 24-month period.
Cummins said the demand for its high-performance computing services is huge due to the growth of the artificial intelligence industry, calling it just the "tip of the iceberg."
As a company that provides the digital infrastructure for this emerging and rapidly growing space, Applied Digital is definitely one to watch. Several analysts have recently raised their price targets for Applied Digital, and the consensus price target is $11.50.
