Wells Fargo said Applied Digital’s roughly 1.4-gigawatt contracted buildout remains on time and on budget, with financing and additional leasing now the key items to watch.
- Wells Fargo raised its Applied Digital price target to $55 from $50 and maintained an Overweight rating.
- The analyst flagged secured debt raises tied to recently signed Meta leases as a next catalyst.
- Applied Digital reported fiscal first-quarter (Q1) results on Wednesday that topped Wall Street expectations.
Applied Digital Corp. (APLD) stock is in the spotlight on Thursday after Wells Fargo raised its price target, with the analyst pointing to financing and additional leasing as the next catalysts following the company’s fiscal first-quarter (Q1) results.
According to TheFly, Wells Fargo raised its target to $55 from $50 and maintained an ‘Overweight’ rating. The firm called the quarter steady and said execution across Applied Digital’s roughly 1.4 gigawatts of contracted capacity remains on time and on budget.
The analyst said the next catalysts to watch are secured debt raises tied to recently signed Meta Platforms Inc. (META) leases and 250 megawatts of expansion leases at higher yields.
As of this writing, APLD stock was trading nearly 3% higher in Thursday’s premarket and was among the top trending tickers on Stocktwits.
Financing Takes Center Stage
Applied Digital has signed three long-term leases with the same U.S.-based high investment-grade hyperscaler covering a combined 810 megawatts of critical IT capacity.
The agreements include 300 megawatts at Delta Forge 1, representing about $7.5 billion in contracted revenue over an estimated 15-year term, and another 300 megawatts at Polaris Forge 3, also worth about $7.5 billion over its 15-year base term.
A third lease covers the full 210 megawatts at Delta Forge 2 and represents about $5.2 billion in base-term contracted revenue. Together, the three projects account for roughly $20.2 billion in contracted revenue.
APLD Sees Up To 4 GW Capacity By 2030
Applied Digital reported fiscal first-quarter (Q1) results on Wednesday that topped Wall Street expectations. The AI data center operator’s revenue for the quarter ended August jumped 322% to $341.9 million from $80.9 million a year earlier, well above the $116.3 million analysts polled by FactSet expected.
Adjusted net loss narrowed to $0.01 per share from $0.03 a year earlier, also beating expectations for a $0.30 loss.
On the earnings call, CEO Wes Cummins said the company expects to bring more than 600 megawatts online over the next 12 months and sees potential to reach 3.5 to 4 gigawatts of operating capacity by the end of 2030.
What Retail Thinks About APLD Stock
On Stocktwits, retail investors’ sentiment around APLD stock remained ‘bullish’ amid extremely high message volume.
So far this year, APLD shares have fallen more than 15%. By comparison, the VanEck Digital Transformation ETF (DAPP), which holds the stock, has risen over 3% over the same period.
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