Applied Digital’s AI Buildout Pace Has Needham ‘Pleasantly Surprised’ After APLD Strikes $5.2B Deal With A Hyperscaler

Needham raised its price target for Applied Digital to $83 from $66, while keeping a ‘Buy’ rating on the stock.

• Needham stated in its note that it believes Applied Digital can continue to source new sites for its AI Factory campus pipeline and execute additional leases with clients.
• Lake Street raised its price target on Applied Digital to $90 from $70 and maintained a ‘Buy’ rating on the stock following the company's latest hyperscaler lease announcement.
• The firm noted that the new agreement increases the company's total contracted revenue backlog to roughly $36 billion, or about $2.4 billion annually.

Applied Digital Corp.’s (APLD) latest hyperscaler deal has analysts at Needham “pleasantly surprised” by the pace of the company’s AI infrastructure buildout.

According to TheFly, Needham raised its price target for Applied Digital to $83 from $66, while keeping a ‘Buy’ rating on the stock. The new price target implies an upside potential of about 78% from current levels

Applied Digital shares were up nearly 14% in Tuesday’s opening trade. APLD was among the top trending tickers on the platform at the time of writing.

APLD’s Latest Deal Has Wall Street More Optimistic

Needham stated in its note that it believes Applied Digital can continue to source new sites for its AI Factory campus pipeline and execute additional leases with clients.

Lake Street raised its price target on Applied Digital to $90 from $70 and maintained a ‘Buy’ rating on the stock following the company's latest hyperscaler lease announcement.

The firm noted that the new $5.2 billion agreement increases the company's total contracted revenue backlog to roughly $36 billion, or about $2.4 billion annually. It described the pace of contract wins as "strong progress," highlighting the company's continued ability to secure additional capacity commitments from major customers.

Meanwhile, analysts at Craig-Hallum raised their price target on Applied Digital to $79 from $75 and reiterated a ‘Buy’ rating. The firm said it remains impressed by Applied Digital's “flywheel,” which has now resulted in five lease agreements and 1.4 gigawatts of contracted capacity across its AI infrastructure portfolio.

APLD Announces New Offering To Fund New Building At Polaris Forge 1

Applied Digital on Tuesday said its subsidiary, APLD ComputeCo 3, plans to offer $1.59 billion of senior secured notes due 2031 in a private placement, subject to market conditions.

The company said it intends to use the proceeds to fund construction of 150 megawatts of critical IT capacity at the ELN-04 building at its Polaris Forge 1 campus in North Dakota, repay a Goldman Sachs bridge loan facility, fund debt service reserves, and cover transaction expenses.

How Did Retail Traders React To APLD Stock?

Retail sentiment on Stocktwits around Applied Digital trended in the ‘bullish’ territory with message volumes at ‘high’ levels at the time of writing.

One bullish user on the platform believes that more hyperscaler contracts are coming Applied Digital’s way.

https://stocktwits.com/Luckin230/message/655820256

APLD stock is up 87% year-to-date and 252% over the past 12 months. The Vanguard Total Stock Market Index Fund ETF (VTI) is up 24% over the past 12 months, while the iShares Russell 2000 ETF (IWM) is up 35%.

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