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Applied Digital (APLD) announced plans to sell its cloud services division, which accounts for roughly one-third of its FY2025 revenues, with the aim of transitioning into a dedicated data center REIT. This decision is driven by growing competition with hyperscale customers and a need to clarify its market position.
The company’s cloud revenue fell by 32-36%, leading to a drop in shares as Q1 results missed revenue expectations (US$52.9M vs. US$64M estimated). In contrast, APLD secured significant contracts, including a $7 billion, 15-year lease with CoreWeave and nearly $5 billion from Macquarie, signaling demand for its HPC infrastructure.
In related news, Advanced Micro Devices (AMD) is negotiating to sell its data-center manufacturing plants for $3-4 billion while retaining design teams to focus on AI-driven semiconductors. Additionally, Boeing (BA) announced its intention to divest substantial parts of its Digital Aviation Solutions business to streamline operations and restore investor confidence.
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