Roth MKM initiated coverage of Applied Digital with a Buy rating and $14 price target. The firm views Applied as “a high-risk/high-return play” on the AI-driven need for high-performance computing, or HPC, the analyst tells investors. At scale, cash flows look “robust,” says the analyst, who acknowledges “significant capital barriers to overcome to obtain operational scale.” The firm expects a notable ramp each quarter in revenue and EBITDA, leading to about 50% margins by FY25, but “financing gaps must still be filled beyond cash flow generation,” the analyst added.
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