Data center operator Applied Digital (APLD 8.66%) was a hot item among investors on Monday. The company’s share price enjoyed a very pleasant boost of almost 9% on the day, on some big news in the artificial intelligence (AI) industry and the appointment of a seasoned tech industry veteran to its board of directors. By comparison, the S&P 500 index crawled up only 0.7%.
The trend was its friend
Applied Digital likes to try to hook itself into big tech and tech-adjacent trends; at one point during the cryptocurrency gold rush it titled itself Applied Blockchain before changing to its current moniker.
Lately, it has been pushing its data center solutions as ideal for AI developers. This, to its credit, could be more reality than hype, as it soon drafted several companies as clients for its self-descriptive AI Cloud Service (under the umbrella of its Sai Computing subsidiary).
This association with AI was a booster on Monday, with the effective firing of OpenAI Sam Altman by that company’s board of directors, and Altman’s subsequent hiring by Microsoft. The tech giant aims to develop an AI team around Altman, making it likely the company will become a powerhouse in that technology before long.
To understate the case somewhat, Microsoft has more than enough resources to pay for outside cloud AI services should it choose to utilize them. The emergence of a large, very steady customer could provide a rich opportunity for a data center operator like Applied Digital.
New board appointment
Separately, Applied Digital announced Monday morning that longtime IBM executive Kate Reed had been elected as an independent director of its board of directors on Nov. 9. Reed’s extensive experience at IBM includes stints in the company’s Red Hat unit, its cybersecurity team, and the Watson platform.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends International Business Machines. The Motley Fool has a disclosure policy.