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On Tuesday, H.C. Wainwright analysts raised the price target for Applied Blockchain Inc (NASDAQ: APLD) to $12 from $7, while maintaining their Buy rating on the stock. Trading at $10.14, the company’s shares have surged 156% over the past year, according to InvestingPro data. The revision follows Applied Digital’s recent announcement of a significant 15-year, $7 billion deal with CoreWeave for a 250MW project in Ellendale, North Dakota.
The agreement with CoreWeave is expected to transform Applied Blockchain’s revenue trajectory for 2026. With a current market capitalization of $2.28 billion and significant debt obligations of nearly $994 million, this deal represents a crucial growth opportunity. The first 100MW of the project is anticipated to be operational by the end of 2025, with the remaining 150MW set to launch by mid-2026. This development is projected to enhance the company’s revenue in the February and May quarters of the next fiscal year.
The analysts estimate that the 150MW running during these quarters could generate nearly $60 million in revenue for Applied Blockchain by the end of fiscal 2026. The company has already demonstrated strong revenue growth, with a 53.7% increase in the last twelve months to $221.19 million. This projection is based on similar deals in the industry, such as those involving Core Scientific and Novogratz’s Helios with CoreWeave.
The upgrade in the price target comes after a period of volatility in the valuation of Applied Blockchain, which has seen multiple adjustments since late 2022. According to InvestingPro, which offers comprehensive analysis and 17+ additional insights about APLD, the stock currently shows high price volatility with a beta of 5.87. The analysts expressed optimism about the new contract and its potential to stabilize the company’s stock valuation, reinforcing their investment thesis. For deeper insights into APLD’s valuation and growth prospects, investors can access the detailed Pro Research Report available exclusively on InvestingPro.
The ongoing discussions about the feasibility of the Ellendale HPC project have influenced the stock’s performance over the past 18 months. The analysts reiterated their Buy rating, highlighting the strategic significance of the CoreWeave deal in supporting Applied Blockchain’s future growth.
In other recent news, Applied Digital Corporation has announced significant developments that are capturing investor attention. The company secured two long-term lease agreements with CoreWeave for its AI data center in North Dakota, expected to generate approximately $7 billion in revenue over their 15-year term. These agreements position Applied Digital as a key provider of infrastructure for AI and high-performance computing (HPC) applications. Additionally, CoreWeave has the option to expand its capacity by another 150 MW, potentially increasing the data center’s role as a significant AI and HPC hub.
In another strategic move, Applied Digital will classify its Cloud Services Business as discontinued operations, following the Board’s approval of its sale. This decision aligns with the company’s strategic shift, as indicated in their SEC filings, and aims to provide investors with a clearer financial picture. Meanwhile, Citizens JMP analysts have raised the price target for Applied Blockchain Inc, a subsidiary, to $18 from $12, maintaining a Market Outperform rating. This adjustment follows a major customer agreement for Applied Digital’s new facility, reflecting positive momentum for the company.
JMP Securities analyst Greg Miller has also maintained a Market Outperform rating for Applied Blockchain, with a price target of $12. Despite some financial challenges and high short interest, these recent developments suggest a promising outlook for Applied Digital’s future in the digital infrastructure market.
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