Applied Digital's Stock Surges 540% Amid AI Boom
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: Fool
- Significant Revenue Growth: Applied Digital's revenue skyrocketed from $8.5 million in fiscal 2022 to $144.2 million in fiscal 2025, indicating strong growth potential in the data center leasing market, with further benefits expected from the expanding AI sector.
- Cloud Business Spin-off: While Applied Digital plans to spin off its cloud infrastructure business in 2023 to address profitability issues, the $16 billion lease agreement with CoreWeave will provide stable cash flow to support future growth.
- High Expansion Costs: The company is expanding its Polaris Forge 1 campus in Ellendale, which will lead to continued losses in the short term; however, this expansion is crucial for achieving its goal of becoming a data center REIT, enhancing its competitive position.
- Equinix's Stability: In contrast, Equinix, as a mature data center REIT with over 270 facilities and stable profitability, is expected to benefit from the AI market growth in the coming years, making it a better choice for conservative investors.
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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 49.18 USD with a low forecast of 36.00 USD and a high forecast of 99.00 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.
11 Analyst Rating
11 Buy
0 Hold
0 Sell
Strong Buy
Current: 40.220
Low
36.00
Averages
49.18
High
99.00
Current: 40.220
Low
36.00
Averages
49.18
High
99.00
About APLD
Applied Digital Corporation is a designer, builder, and operator of sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking, and blockchain workloads. The Company’s segments include data center hosting (Data Center Hosting Business) and high-performance compute hosting (HPC Hosting Business). The Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. Customer-owned hardware is installed in its facilities, and the Company provides operational and maintenance services for a fixed fee. Its facilities include a 106 megawatt (MW) facility in Jamestown and a 180 MW facility in Ellendale, North Dakota. 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. Its HPC data center is located at its Polaris Forge 1 campus with 100 MW capacity.
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.
Top Performing Tech Stocks of January 2026
- Applied Digital's Stellar Performance: Applied Digital Corporation (APLD) achieved an impressive 71.93% price increase over the past month, making it the top performer among tech stocks with a market cap over $10 billion, highlighting its strong growth potential in the AI infrastructure sector.
- Micron Technology's Strong Rebound: Micron Technology, Inc. (MU) ranks second with a 44.05% gain and holds the highest Quant Rating of 4.99 among the top five, indicating optimistic market expectations for its future performance, which may attract more investor interest.
- Semiconductor Sector Leaders: MKS Inc. (MKSI), Entegris, Inc. (ENTG), and Western Digital Corporation (WDC) follow closely with gains of 39.84%, 39.57%, and 39.18%, respectively, showcasing a robust recovery in the semiconductor materials and equipment industry that could drive further investments in related companies.
- Notable Innovation Performance: Onto Innovation Inc. (ONTO) achieved a 29.84% increase and received a Buy Quant Rating of 4.47, reflecting market recognition of its technological innovations, which may provide more opportunities for future growth.
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Applied Digital Shares Surge 68% on AI Factory News
- Significant Stock Surge: Applied Digital's shares have surged over 68% in January, primarily driven by the groundbreaking news of the Delta Forge 1 AI factory, indicating strong market confidence in its future growth prospects.
- Major Investment Backing: Nvidia's $2 billion investment in CoreWeave, purchasing 22.7 million shares at $87.20 each, not only accelerates the construction of AI factories but also provides robust partnership support for Applied Digital.
- Revenue from Lease Agreements: The 15-year lease agreements signed between Applied Digital and CoreWeave are expected to generate approximately $7 billion in revenue, marking a significant advancement in the company's strategic positioning in high-performance computing.
- Shift in Market Sentiment: Retail sentiment on Applied Digital has shifted from neutral to bullish, with message volumes on Stocktwits surging 43% in the last 24 hours, reflecting investor optimism about the company's future performance.
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