Applied Digital Surges 270% in Stock Price, Plans Spin-off of Cloud Business
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: Fool
- Stock Surge: Applied Digital's stock price has soared over 270% in the past 12 months, reflecting strong market recognition of its rapid growth and new lease agreements, particularly with CoreWeave, indicating robust demand in the AI data center sector.
- Business Model Shift: The company has pivoted from renting to Bitcoin miners to focusing on cloud computing and high-performance computing markets, launching a new subsidiary, Sai Computing, which, despite being unprofitable, demonstrates strategic positioning in AI services.
- Expansion Plans: Applied Digital is expanding its Polaris Forge 1 campus, with plans to double its data center capacity in the coming years, potentially generating over $16 billion in lease payments, further solidifying its market position.
- Future Outlook: While the company expects a 38% revenue increase to $297.3 million in fiscal 2026, its lack of profitability may delay its plans to transform into a REIT, prompting investors to carefully assess its short-term valuations.
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: 24.520
Low
35.00
Averages
42.78
High
56.00
Current: 24.520
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.
