2024-07-09 16:51:30 ET
Summary
- From the moment Nvidia's silicon is shipped to the point when it can drive AI applications, a key step is to house them in data centers.
- To this end, Applied Digital Corporation's purpose-built HPC data center is advantageous compared to retrofitting older facilities to make them AI-ready and can also rely on its previous blockchain experience.
- I also shed light on the FCF impact given the financing model based on asset-level financing, which can be daunting for risk-averse investors allergic to high debt levels.
- Do not exclude delays and expect a lot of interest rate-related volatility.
- Finally, for investors seeking an alternative way to invest in AI infrastructure, Applied Digital makes sense from the way it has positioned itself, and comparing its price action with Nvidia is useful.
Trading at around $7, Applied Digital Corporation (APLD) has surged by more than 200% since November 2022 as charted below, even outperforming Nvidia (NVDA) last year and nearly catching up at the beginning of this year before dipping. This price action could suggest some investors view the HPC (high-performance computing) data center play as an alternative way to ride the AI story....
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Applied Digital: An Alternative Way To Invest In AI Infrastructure