Applied Digital Stock Soars 215% in 2025 Amid AI Infrastructure Boom
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5d ago
0mins
Source: Fool
- Earnings Beat: Applied Digital reported a remarkable revenue of $64 million in Q1 FY2026, an 84% year-over-year increase that surpassed the $50 million consensus estimate, primarily driven by a $26.3 million contract with CoreWeave for data center fit-out, showcasing the company's robust growth in the AI infrastructure sector.
- Long-Term Contract Advantage: The 15-year lease agreement with CoreWeave for 400 MW of data center capacity is expected to generate up to $11 billion in revenue, further solidifying Applied Digital's leadership position in the high-performance computing market.
- Future Growth Expectations: Analysts forecast that Applied Digital's revenue for Q2 FY2026 could exceed the $82.2 million estimate, reflecting strong demand for AI factory construction and data center expansion, which could trigger a rally in its stock price.
- Market Valuation Analysis: Despite trading at nearly 33 times sales, indicating a high valuation, analysts believe that Applied Digital's growth potential and strong revenue pipeline justify this valuation, with market cap projections rising from $7.9 billion to $9.7 billion, a 44% increase.
Analyst Views on APLD
Wall Street analysts forecast APLD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for APLD is 42.78 USD with a low forecast of 35.00 USD and a high forecast of 56.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
10 Buy
0 Hold
0 Sell
Strong Buy
Current: 31.940
Low
35.00
Averages
42.78
High
56.00
Current: 31.940
Low
35.00
Averages
42.78
High
56.00
About APLD
Applied Digital Corporation is a designer, builder, and operator engineered data centers and colocation services for Artificial Intelligence (AI), cloud, networking, and blockchain workloads. The Company operates through two operating segments: the Data Center Hosting Business and the HPC Hosting Business. The Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. Its custom-designed data centers allow customers to rent space based on their power requirements also it serves one crypto mining customer. The HPC Hosting Business designs, builds, and operates data centers which are designed to support high-compute applications using advanced technologies and infrastructures to provide services to customers. The Company builds over two HPC focused data center facilities to provide 100 megawatts (MW) and 150 MW. Its subsidiaries include APLD Rattlesnake Den I LLC, Applied Talent Resources LLC, Sai Computing LLC, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
