Applied Digital Corp. (APLD) announced a $5.2 billion hyperscaler lease agreement on Tuesday. Needham analysts raised the company's price target to $83 from $66 while maintaining a 'Buy' rating, citing the AI infrastructure buildout pace. The deal reflects accelerating momentum in AI data center capacity commitments as hyperscalers expand infrastructure to support growing AI workloads.
Analysts Raise Price Targets Following Hyperscaler Deal
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. According to TheFly, the firm's new $83 price target implies approximately 78% upside potential from current levels.
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.
Craig-Hallum raised its 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.
Applied Digital Announces $1.59B Notes Offering for Polaris Forge 1 Expansion
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.
Stock Performance and Retail Sentiment
Applied Digital shares were up nearly 14% in Tuesday's opening trade. APLD was among the top trending tickers on Stocktwits at the time of writing.
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.
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%.
FAQ
What did Applied Digital announce on Tuesday?
Applied Digital announced a $5.2 billion hyperscaler lease agreement on Tuesday and a $1.59 billion senior secured notes offering through its subsidiary APLD ComputeCo 3.
What is Applied Digital's total contracted revenue backlog?
Following the new $5.2 billion agreement, Applied Digital's total contracted revenue backlog increased to roughly $36 billion, or about $2.4 billion annually, according to Lake Street analysts.
