Stock plummets due to delayed delivery of networking components
- Applied Digital shares retreat 23% on FY24 revenue and Ebitda forecast
- Delayed delivery of networking components for GPU clusters
- Stock has more than doubled in the last 12 months
- Revenue and Ebitda expected to be at the low end of past guidance
- Improvement in InfiniBand delivery, but challenges on the transceiver side
- Expectation of receiving four clusters in the next two weeks, but eight weeks behind original expectations
Applied Digital shares have experienced a significant retreat of 23% following the company’s forecast of fiscal 2024 revenue and Ebitda. The retreat is attributed to the delayed delivery of certain networking components for GPU clusters. Despite this setback, the stock has more than doubled in value over the past 12 months. Applied Digital had previously projected revenue between $385 million and $405 million, with adjusted Ebitda expected to be in the range of $195 million and $205 million for fiscal 2024. During an earnings call, executives mentioned an improvement in the delivery of InfiniBand, but highlighted challenges on the transceiver side. The company anticipates receiving four clusters in the next two weeks, although they are currently running about eight weeks behind their original expectations.
Public Companies: Applied Digital (N/A)
Private Companies:
Key People:
Factuality Level: 8
Justification: The article provides specific information about Applied Digital’s forecasted revenue and Ebitda for fiscal 2024, as well as the reason for the low end of the guidance. It also includes details about the delayed delivery of certain networking components and the impact on the stock price. The information is supported by a transcript provided by FactSet. However, the article could have provided more context about the company’s overall performance and the significance of the forecasted numbers.
Noise Level: 7
Justification: The article provides relevant information about Applied Digital’s shares retreating and the reasons behind it. It includes details about the company’s forecasted revenue and Ebitda, as well as the challenges they are facing with the delayed delivery of networking components. The article also mentions the improvement in the delivery of InfiniBand but highlights the specific challenge on the transceiver side. Overall, the article stays on topic and provides some evidence and examples to support its claims. However, it lacks in-depth analysis, antifragility considerations, and actionable insights, which lowers its overall noise level rating.
Financial Relevance: Yes
Financial Markets Impacted: Shares of Applied Digital
Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The news article pertains to the financial performance of Applied Digital and its impact on the company’s shares. There is no mention of any extreme event.
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