Retail Investor Poll Reveals Hyperscaler Lease, Nvidia Investments As Key Catalysts For Applied Digital

Retail investors on Stocktwits are closely watching Applied Digital Corp. (APLD) and its future prospects, with a recent poll revealing that 39% believe strategic investments from Nvidia Corp. (NVDA) and other key players as the most important drivers of the company’s growth.

Applied Digital, an AI infrastructure partner for Nvidia, provides high-performance computing (HPC) data centers optimized for Nvidia's GPU deployments. This includes the Ellendale HPC campus, which will support Nvidia’s H100 GPUs and future generations of its AI chips.

However, other hyperscalers are yet to team up with the company.

Not far behind, 38% believe the hyperscaler lease at the Ellendale HPC campus is the most impactful recent development.  

The company announced a $5 billion funding deal with Macquarie to develop the Ellendale HPC campus earlier this week, a key step in its expansion strategy.

Applied Digital also reported its second-quarter earnings on Tuesday, clocking in revenue of $63.9 million, a 51% increase over the previous year. 

Stocktwits Poll Asking Retail Investors About The Most Impactful Recent Development For Applied Digital Corp.'s  Stock | Source: Stocktwits

Although the hyperscaler lease and strategic investments topped the poll, 14% of retail investors pointed to the increased demand from hyperscalers as the most impactful development. 

While the company is in late-stage discussions with multiple hyperscalers, CEO Wesley Cummins cautioned that these deals may take longer to finalize than initially anticipated, durign the second quarter earnings call. 

“While their timelines may extend longer than initially expected, we remain steadfast in our commitment to delivering our 400 MW data center campus on time and within budget," he said.

Similarly, only 10% of investors chose the growth in cloud services business as the most important development. 

However, Applied Digital’s cloud services business has been growing quarter-on-quarter as the company deploys additional GPU clusters. 

CFO Mohammad Saidal Mohmand noted that the company’s cloud services segment was a primary driver of its second-quarter revenue growth, fueled by the deployment of additional GPU clusters.

One user commented that Applied Digital’s growth won’t be the result of one catalyst or the other, but a combination of all four.

Applied Digital’s stock dipped  was nearly up  2% in Wednesday’s session despite an earnings beat. The stock edged 0.24% higher in after-hours trade.

Applied Digital Corp. Sentiment and Message Volume on Jan.15 as of 11:30 p.m. ET | Source: Stocktwits

Meanwhile, on Stocktwits, retail sentiment around the stock dipped to ‘bullish’ from ‘extremely bullish’ a day ago. Message volume also retracted to ‘high’ from ‘extremely high’ levels during the same period. 

One user questioned if the stock’s dip was caused by the CEO’s comments about “hyperscaler delays.”

Another predicted that Applied Digital’s stock could reach $30 by the end of the year, driven by the completion of the Ellendale campus and an improving macroeconomic environment.

Currently, the average price target for Applied Digital’s stock is $11.75, with all 8 analysts covering the stock giving it a "Buy"-equivalent rating. 

Over the past year, the stock has gained approximately 33%, though it has risen just 6% year-to-date.

While the cloud services market continues to expand, investors believe Applied Digital’s strategic moves in securing partnerships and infrastructure leases are more critical to long-term success.

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