Chip stocks fall with Nvidia after data center rev disappointment
Investing.com - H.C. Wainwright raised its price target on Applied Blockchain Inc (NASDAQ:APLD) to $20.00 from $15.00 on Monday, while maintaining a Buy rating on the stock. The company, currently valued at $3.68 billion, has shown remarkable momentum with a 252% return over the past year. According to InvestingPro analysis, the stock is currently trading near its Fair Value.
The price target increase follows Applied Digital’s August 18 announcement of plans to break ground next month on Polaris Forge 2 near Fargo, North Dakota, in Harwood. The new facility aims for a 280MW power capacity with an estimated $3 billion construction budget. With revenue of $144.19 million in the last twelve months and a high beta of 6.0, the company’s ambitious expansion plans reflect its aggressive growth strategy.
H.C. Wainwright noted that Applied Digital is experiencing "intense demand for HPC hosting services" and is in "advanced negotiations with a U.S. based investment-grade hyperscaler" for the new campus. The firm highlighted that Applied Digital’s success stems from its ability to reduce construction time to 12-14 months compared to the industry norm of 24 months.
The first HPC complex, Polaris Forge 1 in Ellendale, is expected to reach 400MW by 2027, with the first 100MW coming online in Q4 2025. The second building under construction should be operational by mid-2026, bringing a cumulative 250MW per the $11 billion 15-year contract with CoreWeave.
Despite the positive outlook, H.C. Wainwright indicated it was "hesitant to include the Harwood’s site contribution" in its estimates due to the 2026-27 construction timeline, no named customer, and no labeled financing, but expressed confidence that financing would not be an issue given "the overarching state of HPC demand." InvestingPro data reveals some potential risk factors, including a current ratio of 0.77 and significant cash burn. For deeper insights into APLD’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Applied Digital Corporation reported its financial results for the fourth quarter of 2025, surpassing earnings per share (EPS) expectations with a reported EPS of -$0.03 compared to the anticipated -$0.14. However, the company’s revenues fell short of forecasts, coming in at $38 million against the expected $42.07 million. Additionally, Applied Digital announced plans to break ground on a $3 billion AI data center, Polaris Forge 2, in North Dakota by September 2025. The facility is expected to have initial operations in 2026 and reach full capacity by early 2027. In another development, the company doubled its Series G preferred stock offering to $300 million, amending its preferred equity purchase agreement to support the ongoing construction of its Polaris Forge I data center. Furthermore, Craig-Hallum raised its price target for Applied Blockchain to $18.00 from $12.00, maintaining a Buy rating. This adjustment was influenced by the company’s recent 150MW expansion. These developments reflect Applied Digital’s strategic efforts to expand its infrastructure and secure additional capital for its projects.
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