Data center operator Applied Digital (APLD) reported better-than-expected results for the second quarter of Fiscal 2025, beating analyst estimates for revenue and earnings. Despite beating estimates, Applied Digital stock dropped by 7% in yesterday’s extended trading session. This decline reflects investor concerns over a significant net loss of $138.7 million incurred during the quarter.
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Nevertheless, APLD reported an adjusted net loss of $0.06 per share for the quarter, surpassing analyst expectations of $0.15. Also, it compares favorably with a loss of $0.1 per share in the year-ago quarter.
APLD Posts Strong Q2 Revenue Growth
Applied Digital reported fiscal second-quarter revenue of $63.9 million, which beat analyst estimates of $63.4 million and rose an impressive 51% from the year-ago quarter. Interestingly, the Cloud Services segment’s revenue totaled $27.7 million in Q2, up 523% year-over-year.
The upside can be attributed to strong sales growth across its Cloud Services segment, driven by expanding market presence and robust demand for high-performance computing and AI infrastructure.
APLD Secures $5B Investment
Prior to the earnings release, Applied Digital revealed that an Australian fund, Macquarie Asset Management, will invest about $5 billion in the company’s AI data centers. As a result, Macquarie will acquire a 15% stake in APLD’s high-performance computing business and help strengthen its position in the market.
This investment will enable Applied Digital to repay the debt incurred in building its data centers in North Dakota.
Is APLD a Good Stock to Buy?
Turning to Wall Street, APLD stock has a Strong Buy consensus rating based on seven unanimous Buys assigned in the last three months. At $12, the average Applied Digital price target implies a 40.5% upside potential. Shares of the company have gained 26.33% over the past six months.
