(Reuters) -Data-center services provider Applied Digital on Tuesday missed Wall Street estimates for second-quarter revenue on cautious spending by businesses, sending its shares tumbling more than 16% in premarket trading.
The company also said it expects revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) to be below the low end of its previous range for fiscal year 2024.
Revenue of $42.2 million for the quarter ended Nov. 30 was below analysts’ average estimate of $57.3 million, according to LSEG data.
Budgets of tech firms remain tight as they try to rein in costs and build their independent data centers, hurting demand for companies such as Applied Digital in an uncertain economy.
Dallas, Texas-based Applied Digital blamed the delayed delivery of some networking components for graphics processing unit (GPU)clusters for the new expectations.
GPUs have proven to be widely adopted technology to train AI models due to their processing capabilities.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar and Sriraj Kalluvila)
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