AI Infrastructure Firm Applied Digital Cuts Guidance Amid Slowing Growth and Continued Losses
-
Applied Digital, an AI infrastructure company, cut its fiscal 2024 guidance due to ongoing component shortages. Its growth is slowing.
-
The company switched from explicit full-year guidance to a confusing "annualized run rate" metric at year end. This likely means overestimated earlier projections.
-
Despite positive adjusted EBITDA, Applied Digital is still losing money on a GAAP basis and burning cash. It's a high-risk start-up.
-
The company is borrowing money and diluting shareholders to fund operations.
-
Due to moderating AI hype and safer investing options, most regular investors should avoid this speculative stock for now.