Applied Digital stock price target raised to $35 from $18 at Citizens

Investing.com - Citizens raised its price target on Applied Digital (NASDAQ:APLD) to $35 from $18 while maintaining a Market Outperform rating. The stock, currently trading at $27.94, has shown remarkable momentum with a 406% gain over the past six months according to InvestingPro data.

The firm cited Applied Digital’s recent business developments, including a follow-up exercised right of first refusal on Polaris 1 and an expected incremental lease on Polaris 2.

Citizens’ new valuation represents approximately 25 times fiscal year 2028 estimated EV/EBITDA, with the firm noting potential upside to its estimates given recent strength in demand.

The $35 per share equity value represents full execution of approximately 65% of Applied Digital’s 2GW pipeline and includes Citizens’ estimate for Macquarie’s dilution.

When Citizens launched coverage of Applied Digital, it anticipated a binary outcome depending on the company’s ability to close its first deal, which has now materialized with subsequent positive developments.

In other recent news, Applied Digital Corporation has received an initial $112.5 million from its $5 billion perpetual preferred equity financing facility with Macquarie Asset Management. This funding is earmarked for the construction of the company’s 400MW AI Factory campus, Polaris Forge 1, in Ellendale, North Dakota. Additionally, Applied Digital has secured a new lease agreement with CoreWeave for an additional 150MW at Polaris Forge 1, bringing the total anticipated contracted lease revenue to approximately $11 billion. This includes $7 billion from two initial leases executed in May.

Furthermore, Compass Point raised its price target for Applied Blockchain Inc to $30 from $13, maintaining a Buy rating, citing the full leasing of Polaris Forge 1 and the potential for a hyperscaler at Polaris Forge 2. H.C. Wainwright also increased its price target for the company to $20 from $15, following the announcement of plans to break ground on Polaris Forge 2 near Fargo, North Dakota. The new facility has a planned 280MW power capacity with an estimated $3 billion construction budget. These developments reflect Applied Digital’s ongoing efforts to expand its infrastructure to meet the growing demand for AI computing power.

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