What happened
Applied Digital (APLD -2.00%) stock was having a week for the ages, and it was only Tuesday. For the second trading day in a row, the company's share price rocketed higher, sailing almost 17% skyward after a Monday rise of 16%. Investors were still basking in the glow of a solid earnings report, plus an analyst's price target increase.
So what
Before market open, Needham & Company's John Todaro upped his estimation on Applied Digital's fair value. In his view, it's now worth $17.50 per share; previously, his price target was $16. Reflecting the market's current sentiment on the stock, Todaro maintained his buy recommendation on it.
Not coincidentally, the move came a day after Applied Digital published rather strong quarterly results. For its final quarter of fiscal 2023, the company managed to grow its revenue by nearly 200% year over year to $22 million. Although that actually missed the consensus analyst estimate, it beat on the bottom line by narrowing its non-GAAP (adjusted) net loss to $0.01 per share from the year-ago shortfall of $0.04.
Applied Digital is also, smartly, pushing into the hugely popular artificial intelligence (AI) space with a dedicated AI cloud service for its clients. It already has two customers for this offering.
Now what
Analyst takes are not the be-all and end-all of investing, of course. As investors, we should certainly consider the better ones, but ultimately rely on our own judgement and instinct when deciding to pull the trigger on a stock. That being said, Applied Digital's quarterly results were encouraging in many ways, and at the very least, the company is one to watch for tech-savvy investors.