What happened
Investors' thus-far unquenchable thirst for companies involved with artificial intelligence (AI) showed no sign of weakening at the beginning of this trading week. That benefited data center operator Applied Digital (APLD 1.98%) Monday, as did an analyst's price target hike. These two factors helped drive the company's share price almost 14% higher on the day.
So what
Before the market opened Monday, Craig-Hallum prognosticator George Sutton upped his price target on Applied Digital stock from $13 per share to $15 per share. Sutton also maintained his buy recommendation on the shares.
The analyst appeared particularly impressed by Applied's effectiveness in sales.
In his new note, referring to pair of deals for the company's new AI cloud service, he wrote that "After signing deals of $180 million over two years (No. 1) and $460 million over three years (No. 2), it is clear that Applied is part of the top-tier ecosystem of players who can provide both the GPUs, the power and the available space that is at a huge premium in today's market."
GPUs are graphics processing units, advanced processors that now handle many advanced IT functions. They are essential for AI applications, which dovetails with Applied's recently announced offering. Last month, the company launched an AI cloud computing business for its clients, a move that positions it nicely to take advantage of the wave of interest in this technology.
NASDAQ: APLD
Key Data Points
Now what
Sutton's take aside, Applied has shown over the years that it is an able operator in its field, and that it knows how to grow its business. It's also encouraging for investors that it has moved to take advantage of the AI trend, and in what seems to be a sensible and well-considered way.
