Applied Digital price target raised to $39 from $37 at Craig-Hallum

Craig-Hallum raised the firm’s price target on Applied Digital (APLD) to $39 from $37 and keeps a Buy rating on the shares following their announcement of a $5B dollar lease at Polaris Forge 2. The firm notes that although the tenant has yet to be named, the release identifies it as an investment grade hyperscaler which limits the potential tenants to only a few and means financing should come at favorable terms. Craig-Hallum is encouraged to see that the lease comes with a ROFR for the additional 800 MW at the Harwood site and believes Applied Digital is successfully turning North Dakota into a data center hub with a path to significantly more signed capacity in the future. The firm views the weakness in the stock as an opportunity.