Michael Donovan, an analyst at Compass Point, has reaffirmed a bullish outlook on Applied Digital Corporation (APLD) by maintaining a Buy rating on the stock. This sentiment underscores a strong belief in the company’s future potential, further bolstered by recent developments.
Donovan’s confidence is anchored in Applied Digital’s successful leasing of its Polaris Forge 1 facility to CoreWeave. This strategic move not only enhances operational capacity but also assures a steady revenue stream. Looking ahead, the company is also working on securing a significant hyperscaler for the Polaris Forge 2 facility, currently under construction. This ongoing development signifies an ambitious growth trajectory for Applied Digital as it seeks to expand its high-performance computing capabilities.
With long-term leases established with CoreWeave at Polaris Forge 1, Applied Digital anticipates substantial contracted revenue, fortifying its financial positioning. The construction of Polaris Forge 2 and negotiations with a major hyperscaler signal the company’s readiness to utilize market opportunities effectively. These developments, coupled with the growing demand for high-density rack loads, provide a solid foundation for investor confidence, leading to a raised price target of $30.
In a related note, Roth MKM has also maintained a Buy rating on APLD, setting an even more optimistic price target of $43. This consensus among analysts highlights a promising outlook for Applied Digital as it continues to navigate its growth strategy. As the landscape for high-performance computing evolves, companies like Applied Digital are well-positioned to thrive.