Applied Digital beats first-quarter revenue estimates on data center demand

:Applied Digital beat Wall Street estimates for first-quarter revenue on Monday, as rapidly growing generative artificial intelligence (AI) technology boosted demand for the company’s data center services.

Shares of the company rose 7.4 per cent in premarket trading.

The Dallas, Texas-based company benefited from the growing use of generative AI that require high-processing data centers to train large language models powering chatbots like ChatGPT.

“We are finalizing details for our Garden City facility and have a clear path now to reaching 500 MW across our three hosting facilities,” CEO Wes Cummins said in a statement.

Applied Digital reported revenue of $36.3 million for the quarter ended Aug. 31, compared with analysts’ average estimate of $33.8 million, according to LSEG data.

The company’s loss for the reported quarter widened to 10 cents per share from 5 cents per share a year earlier.