Applied Digital Jumped 28% - Here’s Why
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One of the biggest movers on Friday was AI stock Applied Digital (Nasdaq: APLD), which skyrocketed some 28% after the opening bell.
The catalyst was a blowout earnings report for the owner and operator of AI data centers, which led to a slew of Wall Street analyst price target upgrades.
- Revenue: $64.2 million, up 84% year-over-year and better than estimates of $50 million.
- Net loss: $27.8 million, down 275% from the same quarter a year ago.
- Net loss per share: 11 cents, down 200% year-over-year.
- Adjusted net loss per share: 3 cents, up from 1 cent in the same quarter a year ago but better than estimates of a 13 cents per share loss.
The company took major strides in the quarter ended August 31, signing a new lease agreement with CoreWeave for 150 megawatts at its Polaris Forge 1 campus in Ellendale, North Dakota. The Polaris Forge 1 campus is now fully leased with $11 billion in total anticipated contracted lease revenue for Polaris Forge 1.
Building new campus for hyperscaler
The company is in the process of adding more capacity at Polaris Forge 1 due to growing demand. A 100 MW building at Polaris Forge 1 is nearing completion while construction on a new 150 MW building is underway. Additional expansion could push capacity at this campus beyond 1 gigawatt starting in 2028 to 2030.
With hyperscalers expected to invest approximately $350 billion into AI deployment this year, we believe we are in a prime position to serve as the modern-day picks and shovels of the intelligence era,” Wes Cummins, chairman and CEO of Applied Digital, said.
Applied Digital also broke ground on its 200 MW Polaris Forge 2 AI data center campus, which will come online in 2026 and reach full capacity in 2027. Applied Digital is currently in advanced discussions with a hyperscaler to utilize this facility.
“When signed, the initial 200 MW alone would bring our total leased capacity to 600 MW across two sites with two major hyperscalers,” Cummins said. “Once both campuses are anchored by long-term hyperscaler commitments, we feel Applied Digital will be strongly positioned to lead the next wave of AI infrastructure development, supported by multi-year lease agreements that provide scale and visibility.”
Price target upgrades
The company has secured financing from Macquarie Asset Management to fund its expansion plans. With the rapid growth of AI and surging demand for AI, Cummins said Applied Digital is “poised to capitalize on a generational opportunity.”
Many Wall Street analysts concur, as the stock received several price target upgrades Friday.
The biggest raise came from Roth Capital, which boosted it by $13 to $56 per share. That would be a 55% return over its current $36 per price. Roth cited its accelerating expansion, advanced hyperscaler talks, and the potential for industry-leading contracted megawatts in 2026, reported the Fly.
In addition, Needham raised Applied Digital’s price target to $41 while Northland lifted it to $40.
The stock got most of that on Friday, rising some 28%. Applied Digital stock is now up a whopping 372% year-to-date.
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