Applied Digital, previously Applied Blockchain, saw stock soar 1,720% over three years after rebranding as an AI infrastructure provider in 2022. With lease deals totaling $11 billion and revenue up 250% year over year, the company’s future looks promising. But with significant cash burn and dependency on two major clients, risks exist.

AI infrastructure demand is high, and Applied Digital is well-positioned with data centers in North Dakota’s low-cost, cold climate. Lease deals with CoreWeave and a U.S. hyperscaler anticipate $16 billion in revenue. Despite risks, revenue growth is impressive, but the company is trading at a high valuation.

While Applied Digital’s revenue growth is impressive, the company carries substantial risk and is currently unprofitable. With a high valuation and significant cash burn, caution is advised. However, with robust demand for data centers, Applied Digital may continue to outperform the market, making it worth considering as an investment.

Investors should carefully consider before buying stock in Applied Digital, as the company is unprofitable and has significant risks. The Motley Fool Stock Advisor team has identified 10 other stocks with potential for high returns, excluding Applied Digital. The company’s future performance remains uncertain, but its value as an investment is not solely dependent on a potential stock split.

Read more at Yahoo Finance: Stock-Split Watch: Is Applied Digital Next?