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On Thursday, Applied Blockchain Inc (NASDAQ:APLD), currently valued at $1.52 billion, received a Market Outperform rating from Citizens JMP, accompanied by a $12.00 price target. The new coverage comes with an optimistic outlook on the company’s strategic transition. According to InvestingPro data, analyst targets for APLD range from $7 to $18, reflecting strong confidence in the company’s potential despite its current high volatility (Beta: 5.81). Applied Blockchain, which has rebranded to Applied Digital Corp., is shifting its focus from bitcoin mining digital infrastructure to serving the high-performance compute industry, including cloud compute and artificial intelligence (AI).
The rebranding effort, which took place in late 2022, is part of the company’s broader strategy to develop assets for some of the largest hyperscalers in the U.S. According to Citizens JMP, Applied Digital is expected to start executing on this strategy imminently, with the anticipation of securing a significant contract from at least one notable hyperscaler customer. InvestingPro analysis shows the company is positioned for 34% revenue growth in FY2025, though it operates with a significant debt-to-equity ratio of 2.19.
The analyst at Citizens JMP noted the company’s share price has seen a decline due to delays in contract signings. The price has fallen from over $10.00 on December 24 to the $4.00 range in the third fiscal quarter of 2025. However, recent momentum shows promise, with a 21.29% return over the past week. Despite these setbacks, the analyst remains confident in Applied Digital’s potential to successfully pivot and capitalize on the growing demand for digital infrastructure in cloud computing and AI. For deeper insights into APLD’s financial health and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 US stocks.
The $12.00 price target set by Citizens JMP suggests a strong confidence in the company’s ability to recover and excel in its new market segment. This target represents a significant increase from the current trading levels observed in the third fiscal quarter of 2025.
Applied Digital Corp.’s strategic redirection is a response to the evolving demands of the technology sector. By moving away from its original focus on bitcoin mining, the company aims to position itself at the forefront of digital infrastructure services, a sector with increasing relevance as industries continue to adopt cloud and AI solutions.
In other recent news, Applied Blockchain Inc. reported earnings that fell short of expectations, with Cloud Services revenue at approximately $17.7 million, missing the projected $27 million. This shortfall led Craig-Hallum to cut their price target for the company from $12 to $10, while maintaining a Buy rating. Cantor Fitzgerald also revised their price target for Applied Blockchain, lowering it from $14 to $7, but kept an Overweight rating, highlighting the potential of the Ellendale facility.
Applied Digital Corp, the parent company, revealed a net loss of $0.08 per share for Q3 FY2025, surpassing analyst expectations of a $0.11 loss, yet missing revenue forecasts with $52.9 million reported against an expected $64.96 million. The data center hosting segment was a significant contributor, generating $35.2 million in revenue. Despite the revenue miss, the company’s adjusted EBITDA saw a substantial increase to $10 million, marking an 878% improvement.
The firm is exploring strategic options for its cloud services business and has secured significant financing to support operations. CEO Wes Cummins (NYSE:CMI) emphasized the strategic positioning of their data centers, while CFO Saddal Moomed noted the focus on reducing the cost of capital. Analysts from Cantor Fitzgerald expressed confidence in the company’s prospects, particularly regarding the Ellendale facility, which could potentially be worth more than the current trading price of the shares.
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