CORZ, WULF and APLD Stocks Set to Boom? Thank AI/ Bitcoin Data Centers

09/24/2024 22:31

Data centers, AI, and Bitcoin mining are three fast-growing businesses bound to be multi-year megatrends. CORZ, WULF, and APLD are three companies that should benefit for years.

AI: The Biggest Advance Since the Internet

Most people forget that the internet was invented in 1983. However, it took until the late 1990s for the internet industry to go mainstream. Pivotal technological advancements, namely Tim Berners-Lee’s World Wide Web invention, the development of web browsers, and the availability of high-speed internet, were pivotal advances that led to the internet age.

Since gaining popularity in the late 1990s, the internet industry has repeatedly delivered stock market winners. Could artificial intelligence stocks provide similar true market leaders like the internet once did? According to the world’s top technologists, the answer is a resounding “Yes!”

“AI will have more impact than the personal computer, the phone or the internet. It’s the most exciting innovation of my lifetime.” ~ Bill Gates, co-founder, Microsoft (MSFT)

Bitcoin: The Top Performing Asset

Unlike artificial intelligence, few saw the Bitcoin wave coming. Bitcoin started as a white paper in 2008 and was mainly used by internet nerds or for nefarious reasons like online drug transactions. However, the world’s first and largest digital currency has defied many skeptics along the way and has transformed into the decade’s top-performing asset class, accruing gains of more than 6,000%. Though Bitcoin’s success has exceeded all expectations, its growth trajectory is still getting started.

For example, Blackrock (BLK), the world’s largest asset manager, launched theiShares Bitcoin Trust ETF (IBIT) in January 2024. Governments, public companies, and money managers are still hungry to get a piece of the pie.

What Does Bitcoin Mining and Artificial Intelligence Have in Common?

Bitcoin mining and artificial intelligence share a fundamental technological requirement: massive parallel computing power. Bitcoin miners use this technology to solve cryptographic puzzles to mine Bitcoin, while AI companies leverage the technology to train their models. Below are three companies that benefit from these two megatrends:

1. TeraWulf: A Clean Energy Leader

TeraWulf (WULF) is an “infrastructure-focused Bitcoin mining company accelerating the transition to a zero-carbon future.” The company focuses on helping Bitcoin miners to mine Bitcoin using sustainable energy sources like nuclear, hydro, and solar energy. With massive data center construction underway for Bitcoin mining applications and AI, the need for clean energy is becoming abundantly clear.

Last week, Microsoft (MSFT) announced a massive deal with Constellation Energy (CEG) to revive the closed Three Mile Island by 2028 to power its data centers with nuclear energy. MSFT is likely the first mover, but other tech companies will likely follow suit and WULF is set up perfectly to benefit. By the end of 2025, the company estimates t its energy production capability will double.

Image Source: Zacks Investment Research

2. Core Scientific: A Bitcoin Mining Leader

Core Scientific (CORZ) is one of the top digital asset miners and operates several data centers nationwide. CORZ derives most of its revenue from Bitcoin mining. Over the past three years, no other public company has mined more Bitcoin than CORZ.

Image Source: Core Scientific

3. Applied Digital Will Benefit from Nvidia Deal

Applied Digital (APLD) is a “designer, builder, and operator of next-generation digital infrastructure designed for High-Performance Computing (HPC) applications. Earlier this month, APLD shares soared 65% after the company announced a $160 million deal with Nvidia (NVDA) to bring its data center and GPU cloud solutions to scale. After digesting its recent gains, APLD shares are trying to break out of a multi-month base structure.

Image Source: Zacks Investment Research

Bottom Line

Data centers, AI, and Bitcoin mining are three fast-growing businesses bound to be multi-year megatrends. CORZ, WULF, and APLD are three companies that should benefit for years.

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