Applied Digital On Track With Long-Term HPC Opportunity, Analyst Says After Q2 Results

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  • Needham's John Todaro maintained a Buy rating on Applied Digital Corp APLD with a price target of $5.50.
  • Applied Digital posted Q2'FY23 results after the close yesterday. 
  • The company beat its top-line guidance shared last year while modestly missing Todaro's estimates.
  • Q2'FY23 revenue stood at $12.3 million, below Needham's $13 million and against the Street consensus of $12.2 million.
  • Q2'FY23 adjusted EBITDA loss of $(2.13) million missed Needham's $(0.70) million loss and Street consensus loss of $(1.18) million.
  • Q2'FY23 EPS loss of $(0.29) missed Street's consensus loss of $(0.06).
  • In Todaro's view, Applied Digital is on track to hit top-line and adjusted EBITDA estimates with facility expansions tracking along. 
  • APLD's Texas facility won regulatory approval and will likely be energized in Feb '23. 
  • Todaro shared excitement about the longer-term opportunity in HPC, given the more robust economics and the demand backdrop stemming from AI and machine learning. 
  • Price Action: APLD shares traded higher by 2.40% at $2.13 on the last check Tuesday.
  • Photo Via Company
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