Craig-Hallum raised the firm’s price target on Applied Digital to $12 from $10 and keeps a Buy rating on the shares. The firm notes the company reported quarterly results that were ahead of expectations. The revenue beat was largely driven by higher AI Cloud revenue as two GPU clusters moved into revenue generation during the quarter. Going forward, Craig-Hallum has modestly reduced its revenue estimates and anticipates that Q1 will serve as a good run rate in the near term, while by the end of the year, it anticipates more clarity on the timing of Ellendale and the addition of more GPUs, each of which provides a significant catalyst in the long term.
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