Applied Digital shares rally after upbeat quarterly revenue on AI demand

(Reuters) -Applied Digital's shares surged 26% on Friday after the data center service provider topped analysts' estimates for first-quarter revenue, bolstered by rising adoption of artificial intelligence applications. Growing demand for AI services such as ChatGPT has triggered the need for robust data center infrastructure that can support intensive computing workloads. The company is set to add over $2 billion to its market value of $7.89 billion, if Friday's gains hold. Applied Digital's stock was the top trending ticker on retail investor forum Stocktwits on Friday. All nine brokerages that cover Applied Digital rate the stock "buy" or higher, with a median price target of $40, according to data compiled by LSEG. Late Thursday, the company reported an 84% rise in revenue to $64.2 million for the quarter ended August 31, compared with analysts' average estimate of $50 million. Applied Digital had finalized a new lease agreement with CoreWeave in August for an additional 150MW in North Dakota. (Reporting by Jaspreet Singh in Bengaluru; Editing by Leroy Leo)

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