Artificial intelligence (AI) is rapidly growing, with companies investing billions into infrastructure for large language models, machine learning, generative AI, and more. The global AI market size reached $279.2 billion last year and is projected to hit nearly $3.5 trillion by 2033, showing a 31.5% compound annual growth rate.
Nvidia CEO Jensen Huang highlights the high demand for AI as a potential issue, stating that “AIs are smart enough that everybody wants to use it.” This demand has led to an exponential increase in the need for new technology and infrastructure, pointing to a new industrial revolution.
As AI workloads increase, the power requirements also surge. Without the necessary infrastructure to power and cool data centers for AI processing, growth will be hindered. Companies like Applied Digital are stepping in to design and build the critical digital infrastructure needed for this expansion.
Applied Digital, based in Dallas, specializes in creating next-generation digital infrastructure to support high-performance computing applications like blockchain. With the significant increase in data center construction since 2022, the demand for power sources to sustain these centers is a growing challenge.
Applied Digital’s stock has seen a 375% increase in the past year, significantly outperforming major AI companies like Nvidia and Palantir Technologies. The company’s strategic location in North Dakota, known for its cooler climate, has helped secure power sources for its data centers and contributed to its stock’s impressive growth.
Following their first-quarter fiscal 2026 results, Applied Digital reported revenue of $64.2 million, up 84% from the previous year. Despite a net loss of $18.5 million, the company saw better-than-expected earnings per share of $0.07, beating analyst estimates.
Applied Digital recently announced a new lease agreement with CoreWeave for an additional 150 megawatts of power at one of their campuses. This deal brings the facility to full capacity with 400 MW of power and is expected to generate $11 billion in revenue over the life of the agreements.
Analysts are overwhelmingly bullish on Applied Digital, with the stock jumping 30% following the earnings report. With a high price target of $56 indicating a 51% upside, the company appears well-positioned to meet the increasing power demands of data centers and AI programs, making it a compelling investment opportunity.
Read more at Yahoo Finance: Jensen Huang Says the U.S. Is Desperate for Data Centers. Here’s 1 Top-Rated Stock to Buy Now.