Applied Digital’s Dramatic Dive: A Comedy of Errors in Cloud Computing! 😂

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What to know:

  • Oh dear! Applied Digital (APLD) shares took a nosedive—down 30% on Tuesday, after the quarterly earnings report left investors gasping for air.
  • With a revenue of $52.9 million, the firm fell short of analyst expectations by nearly 18%. The cloud computing business? Well, it seems to have lost its way too!
  • In a bold move, the board decided to sell off the cloud services business, focusing instead on high-performance computing (HPC) data centers. Who needs clouds when you can have solid ground, right? 🌥️➡️🏢

Shares of Applied Digital (APLD), a Texas-based bitcoin mining and data center firm, plummeted like a lead balloon on Tuesday. The digital infrastructure provider’s quarterly results were about as welcome as a rainstorm at a picnic.

Once a proud crypto mining entity, the company has now pivoted to high-performance computing (HPC) and AI-focused data centers. They reported a revenue of $52.9 million for the quarter ending February 28, 2025—a 22% increase from last year, but still a far cry from the analysts’ consensus estimate of $64.5 million. Oops! 😬

Despite the revenue miss, Applied Digital managed to report a non-GAAP net loss of $0.08 per share, which was better than the analysts’ expectations of a $0.10 loss. But wait! Adjusted EBITDA came in at $10 million, a whopping 41% miss compared to the expected $16.9 million. Talk about a rollercoaster of emotions! 🎢

APLD shares plummeted as much as 30% from Monday’s close, trading around $3.90 in the early hours. A significant drag came from the company’s Cloud Services unit, which saw a staggering 36% revenue decline, dropping from $27.7 million to $17.8 million. Apparently, switching from single-tenant contracts to a multi-tenant, on-demand GPU model was not as smooth as they hoped. Who knew? 🤷‍♂️

On April 10, the board approved a plan to sell the Cloud Services business entirely, aiming to refocus on its core HPC data center operations. Maybe they think clouds are overrated? 🌥️❌

“We believe separating the Cloud Services business from our data center operations better serves the long-term interests of our shareholders,” said CEO Wes Cummins on the company’s earnings call. Well, at least someone is optimistic! 😅

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2025-04-15 18:27