Applied Digital Corp. (NASDAQ:APLD) announced on Monday that its Ellendale data center is now fully operational after completing upgrades to the facility's equipment. The data center, which suffered a complete outage on January 19, 2024, due to substandard transformers, has been restored to its full operating capacity of 180 megawatts as of June 28, 2024.
The Texas-based company, which specializes in computer processing and data preparation services, had experienced significant power disruptions at its Ellendale Facility earlier this year. The issues were attributed to transformers that did not meet industry standards. To address the problem, Applied Digital secured new transformers and related components from leading manufacturers in North America and initiated re-energizing procedures.
Despite the outage at the Ellendale Facility, the company reported that its high-performance computing (HPC) hosting data centers continued to operate normally. These data centers are designed to offer higher availability levels in line with industry benchmarks. Additionally, Applied Digital's cloud services business was not affected by the Ellendale outage, as it relies on third-party facilities.
The article is based on an 8K filing.
In other recent news, Applied Digital Corporation has made significant strides in its fiscal developments, despite a reported net loss of $62.8 million and revenues of $43.3 million for the fiscal third quarter.
The company has secured a $125 million financing commitment from CIM Group for its High-Performance Computing Campus in Ellendale, North Dakota, which could potentially increase to $200 million upon mutual agreement. Additionally, Applied Digital issued a $42.1 million convertible debenture in a private financing agreement and a warrant for the purchase of up to 6.3 million shares as part of a financing agreement with CIM APLD Lender Holdings, LLC.
The company's growth prospects have led B.Riley and Roth/MKM to raise their price targets for Applied Digital to $8.00 and $11.00 respectively while maintaining a "Buy" rating. Analysts have highlighted the company's potential in high-performance computing (HPC) and artificial intelligence (AI), as well as the company's strategic position in North Dakota, where it has visibility to 850-900 MW and over 2 gigawatts across its entire portfolio.
In further developments, Needham has maintained its Buy rating on Applied Digital, endorsing the company as a top pick for AI/HPC infrastructure. The firm highlighted Applied Digital's operational advantages and its ongoing construction of a 100MW HPC site in North Dakota.
Lastly, in leadership news, the company has appointed Todd Gale as its new Chief Development Officer and added Ella Benson as an independent director to its Board of Directors. These appointments signal Applied Digital's commitment to advancing its HPC data center and diversifying its customer base.
InvestingPro Insights
Applied Digital Corp. (NASDAQ:APLD) has shown resilience, with its Ellendale datacenter now fully operational. Investors monitoring the company's performance will find the following metrics from InvestingPro noteworthy: a Market Cap of $903.26M, a significant Revenue Growth over the last twelve months as of Q3 2024 at 252.07%, and a notable one-month Price Total Return of 53.66%. While the company has faced challenges, such as high price volatility and weak gross profit margins, these figures indicate a robust recovery in terms of revenue and market response.
InvestingPro Tips suggest that analysts are optimistic about sales growth in the current year, which aligns with the recent operational advancements at the Ellendale datacenter. However, they also note that Applied Digital is expected to face a drop in net income and does not pay dividends to shareholders, presenting a mixed picture for potential investors.
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