Applied Digital Corp. (NASDAQ: APLD)

Applied Digital Corp., known by its ticker symbol APLD, is a significant player in the technology infrastructure industry. The company specializes in three key areas: artificial intelligence (AI) cloud services, high-performance computing (HPC) datacenter hosting, and crypto datacenter hosting.

Applied Digital Corp.'s operations span across various business segments. The AI Cloud Service segment, run through its subsidiary Sai Computing, offers cloud services specifically designed for AI and machine learning applications. The company has recently launched this business line and has already secured a major AI customer, worth up to $180 million over 24 months.

The HPC Datacenter Hosting segment focuses on designing, building, and operating next-generation datacenters. These datacenters provide substantial computing power and support high-compute applications in a cost-effective manner. The company has initiated testing of HPC hosting at its 5-megawatt facility in Jamestown, North Dakota, with plans to expand up to 200 megawatts.

The Crypto Datacenter Hosting segment offers infrastructure and colocation services to crypto mining customers. The company has established a pipeline of potential power sources across its sites and has entered into long-term fixed-rate contracts with its customers.

Applied Digital Corp. boasts a strong management team with expertise in designing and constructing hosting facilities. The company has also forged strategic collaborations with leading industry participants like Super Micro Computer, Inc. and Hewlett Packard Enterprise Company to deliver its AI Cloud service and HPC datacenter hosting businesses.

The company's competitive advantages include premier strategic collaborations, access to low-cost power with long-term services agreements, the benefits of Next-Gen datacenters compared to traditional datacenters, predictable, recurring revenue and cash flow, and a robust management team.

In the crypto datacenter hosting business, Applied Digital Corp. has significant customer concentrations, with Spring Mud, LLC, Bitmain Technologies Limited, Arrakis, Inc., Hashing LLC, Marathon Digital Holdings, Inc., and Global Operating Infrastructure, LLC as its key customers. In its AI cloud services business, the company also has material customer concentrations, with only two customers.

Applied Digital Corp. is committed to expanding its businesses, leveraging leading equipment vendors to grow operations while minimizing risk, and securing scalable power sites. The company is also considering opportunities for limiting the environmental impact of its business, such as the use of renewable energy sources.

In terms of environmental regulations, the company is subject to various federal, state, and local regulations related to the use and disposal of hazardous materials and environmental impact assessments.

As of May 31, 2023, the company had 121 full-time employees and 6 independent contractors dedicated to its business. The company also relies on independent organizations, advisors, and consultants to perform certain services.