Applied Digital forecast annual revenue above market estimates on Monday, as the rise of artificial intelligence drives up demand for its data center services, sending the company’s shares 18 per cent higher in early trading.
Demand for data storage and high-power computing systems (HPC) has picked up pace as both businesses and consumers turn to generative AI applications such as ChatGPT for everything from homework to campaign pitches and writing emails.
Applied Digital launched its AI cloud offering earlier this year and has already signed contracts for the service, including an agreement worth as much as $180 million with Character A.I.
“We will accelerate our focus on non-crypto use cases and leverage capabilities of our next-generation proprietary data center assets for HPC applications,” said CEO Wes Cummins.
The company expects annual revenue in the range of $385 million to $405 million, compared with analysts’ average expectations of $308.8 million, according to Refinitiv data.
The company reported revenue of $22 million for the three months to May 31, compared with analysts’ average estimate of $26.4 million.
Its loss per share was 7 cents, compared with 4 cents a year earlier.
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