AI Daily: Applied Digital jumps on stronger than expected top-line results

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

AI ENTHUSIASM: Applied Digital (APLD) soared on Friday on AI enthusiasm. The company reported strong Q1 revenue boosted by AI data center leasing. Several Wall Street analysts raised their price targets on the stock following the quarterly results. Needham analyst John Todaro raised the firm’s price target on Applied Digital to $41 from $21 and kept a Buy rating on the shares. The company reported stronger than expected top-line results, and all eyes now turn to Polaris Forge 2, where a lease with an IG hyperscaler is upcoming, the analyst tells investors in a research note. Needham adds that it has increasing confidence in Applied’s pipeline, with the management believing that over the next 3-5 years, PF-1 and PF-2 can scale to 1GW each and up to 4GW of long-term potential capacity.

Craig-Hallum also raised the firm’s price target on Buy-rated Applied Digital to $37 from $23. The firm notes that development for CoreWeave (CRWV), their major customer at Ellendale, continues with building 1 part-way through the fit-out and building 2 being built in earnest. Beyond that, the company appears ready to sign a lease for their Harwood site where they have secured early financing through Macquarie, broken ground, and are expecting a much quicker build time than the 24 months the first Ellendale building took. As if this wasn’t enough, the company has started early-stage discussions with two new hyperscalers at two new sites, Craig-Hallum adds. While the firm doesn’t want to jump at the idea of early-stage negotiations, it thinks the current moment marks the beginning of a flywheel for Applied Digital.

BUY PONY AI: Jefferies initiated coverage of Pony AI (PONY) with a Buy rating and $32.80 price target. China’s Robotaxi market is transitioning from pilot to scale and Pony “stands out for its regulatory leadership, cost-down roadmap, and full-stack capabilities,” the firm tells investors. Jefferies, which views Pony as best positioned to harness network effects and margin expansion as autonomous mobility scales, sees the company capturing 30% of the domestic Chinese market long term.

NVIDIA AI CHIPS: China has stepped up the enforcement of its controls on chip imports, as Beijing seeks to wean the country’s technology companies away from U.S. products such as Nvidia’s (NVDA) AI processors, Financial Times’ Zijing Wu and Cheng Leng report. Teams of customs officers have been mobilized at major ports across the country in the past few weeks to carry out stringent checks on semiconductor shipments, according to three people with knowledge of the matter. The targeted processors – Nvidia’s H20 and RTX Pro 6000D – are designed to adhere to U.S. export controls and maintain the Silicon Valley chipmaker’s market share in China, the authors note.