Looking back on it services & other tech stocks’ Q4 earnings, we examine this quarter’s best and worst performers, including Applied Digital (NASDAQ:APLD) and its peers.
The IT and tech services subsector is poised for growth as businesses accelerate cloud adoption, AI-driven network automation, and edge computing deployments. While these seem like big, nebulous trends, they require very real products like switches and firewalls as well as implementation services. On the other hand, challenges on the horizon include intensifying competition from cloud-native networking providers, regulatory scrutiny over data privacy and cybersecurity, and potential supply chain constraints for networking hardware. While AI and automation will enhance network efficiency and security, they also introduce risks related to algorithmic bias, compliance complexity, and increased energy consumption.
The 20 it services & other tech stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 14.6% since the latest earnings results.
Best Q4: Applied Digital (NASDAQ:APLD)
Pivoting from its origins in cryptocurrency mining to meet the surging demand for AI computing power, Applied Digital (NASDAQ:APLD) designs and operates specialized data centers that provide high-performance computing infrastructure for artificial intelligence and blockchain applications.
Applied Digital reported revenues of $63.87 million, up 51.3% year on year. This print exceeded analysts’ expectations by 4.3%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ EPS estimates.
The stock is down 25.5% since reporting and currently trades at $6.36.
Grid Dynamics (NASDAQ:GDYN)
Founded during the early days of cloud computing in 2006, Grid Dynamics (NASDAQ:GDYN) is a technology consulting firm that helps large enterprises modernize their operations through cloud computing, artificial intelligence, and digital engineering services.
Grid Dynamics reported revenues of $100.3 million, up 28.5% year on year, outperforming analysts’ expectations by 4.3%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
Grid Dynamics pulled off the highest full-year guidance raise among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 15% since reporting. It currently trades at $17.43.
Is now the time to buy Grid Dynamics? Access our full analysis of the earnings results here, it’s free.
Slowest Q4: Diebold Nixdorf (NYSE:DBD)
With roots dating back to 1859 and a presence in over 100 countries, Diebold Nixdorf (NYSE:DBD) provides automated self-service technology, software, and services that help banks and retailers manage transactions and customer experiences.
Diebold Nixdorf reported revenues of $988.9 million, down 4.6% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 1.2% since the results and currently trades at $43.41.
Read our full analysis of Diebold Nixdorf’s results here.
Super Micro (NASDAQ:SMCI)
Founded in Silicon Valley in 1993 and known for its "Building Block Solutions" approach to server design, Super Micro (NASDAQ:SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Super Micro reported revenues of $5.68 billion, up 54.9% year on year. This print missed analysts’ expectations by 3.5%. It was a slower quarter as it also recorded a significant miss of analysts’ operating income estimates.
Super Micro had the weakest performance against analyst estimates among its peers. The stock is down 17.5% since reporting and currently trades at $37.55.
Read our full, actionable report on Super Micro here, it’s free.
Cisco (NASDAQ:CSCO)
Founded by a husband and wife team who wanted computers at Stanford to communicate better, Cisco Systems (NASDAQ:CSCO) designs and sells networking equipment, security solutions, and collaboration tools that help businesses connect and secure their digital operations.
Cisco reported revenues of $13.99 billion, up 9.4% year on year. This result surpassed analysts’ expectations by 0.7%. It was a satisfactory quarter as it also produced a solid beat of analysts’ billings estimates.
The stock is flat since reporting and currently trades at $62.30.
Read our full, actionable report on Cisco here, it’s free.
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