In a report released yesterday, Michael Donovan from Compass Point maintained a Buy rating on Applied Digital Corporation, with a price target of $28.00.
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Michael Donovan has given his Buy rating due to a combination of factors influencing Applied Digital Corporation’s prospects. The company recently secured a significant 15-year lease agreement with a major U.S.-based hyperscaler, which is valued at $5 billion in contracted revenue. This deal not only strengthens Applied Digital’s position but also includes an option for an additional 800MW of capacity, indicating strong future growth potential.
Furthermore, Applied Digital’s ability to quickly transition from a signed Master Service Agreement to a full lease in just four months demonstrates its operational efficiency and appeal to large-scale clients. The company’s strategic pipeline and accelerated build cadence are designed to meet the increasing demand for power, particularly as hyperscalers face pressure to secure sufficient power to meet AI mandates. Given these developments and the potential for expansion beyond North Dakota, Donovan sees a strong possibility for continued growth, justifying the Buy rating.
In another report released on October 23, Roth MKM also maintained a Buy rating on the stock with a $56.00 price target.
Based on the recent corporate insider activity of 36 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of APLD in relation to earlier this year.