Applied Digital beats quarterly revenue estimates on surging AI infrastructure demand

July 27 - Applied Digital beat Wall Street estimates for fourth-quarter revenue on Monday, riding on robust demand for its data centers from an expanding roster of AI clients.

Shares of the company, which counts CoreWeave as a client, rose 5.4% in extended trading. They have risen 7.6% this year, as of Monday's close.

Applied Digital designs, builds and operates data centers and provides colocation services for artificial intelligence, networking and blockchain workloads.

The company has signed long-term colocation contracts with AI and networking customers racing to secure data-center capacity to power their models and services.

Here are some details:

• The data center provider's revenue surged 407% to $258.7 million for the fourth quarter ended May 31, surpassing analysts' average estimate of $94.8 million, according to data compiled by LSEG.
• Applied Digital reported per-share adjusted income of 4 cents, compared with a loss of 22 cents expected by analysts.
• "We are still in the early innings of what we believe will likely be the largest buildout of critical infrastructure in modern economic history," CEO Wes Cummins said.
• "We see demand for high-power-density, purpose-built AI data centers remaining extremely robust," Cummins added.
• The company in June announced a 15-year lease with a U.S.-based hyperscaler at its Delta Forge 2 site expected to generate $5.2 billion in revenue. That followed the $7.5 billion long-term deal signed in April with an unnamed hyperscaler at its Delta Forge 1 facility.
• About 70% of contracted revenue is now backed by U.S.-based investment-grade hyperscalers, the company has said.