Applied Digital (APLD: NSD), a leading provider of data center services, is facing financial repercussions due to an ongoing power outage at its Ellendale, North Dakota facility.
The outage, which began on January 18th and resulted in a complete shutdown by the 19th, has significantly impacted the company’s operations and is expected to materially affect its first-quarter revenue.
Share Prices Plummet as Outage Continues:
News of the extended outage sent APLD shares tumbling over 10% in extended trading on Friday, February 9th. The company estimates the Ellendale facility alone will contribute to a significant revenue shortfall for the quarter ending February 29th. While Applied Digital expects the facility to be back online sometime this month, the disruption has already caused damage.
Industry Experts Weigh In:
The Ellendale outage comes at a sensitive time for Applied Digital, which recently lowered its full-year earnings expectations due to ongoing supply chain constraints for chipmaker Nvidia’s networking components. This latest setback adds to the company’s challenges and raises concerns about its ability to meet investor expectations.
Conclusion:
While the full extent of the damage remains to be seen, the Ellendale outage highlights the risks associated with relying on a single data center location. As Applied Digital grapples with the immediate financial impact, investors will be closely watching how the company manages this crisis and mitigates future risks.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
