Applied Digital (APLD) stock is hot on Wall Street again. The company is now receiving significant attention after securing a 15-year take-or-pay lease with a U.S. hyperscaler for its new Polaris Forge 3 AI campus. The campus is designed to handle 300 megawatts (MW) of critical load backed by 430 MW of grid power. For the company, this translates to $7.5 billion in base contracted revenue and up to $18.2 billion if options related to future expansion and extra power capacity are included. This not only confirms the long-term power demand but also positions Applied Digital as the right company to deliver that capacity.
Wall Street has responded positively to the recent development, with analysts from Needham and Lake Street assigning price targets of $66 and $70, respectively. Needham analysts were particularly impressed by the speed of the deal, together with the fact that the company is already marketing more sites to the same customer. Applied Digital’s short-term execution has been flawless, and if the trend continues, future capacity additions should follow.
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About Applied Digital Stock
Applied Digital builds and operates digital infrastructure for AI and computing companies in North America. Headquarted in Dallas, Texas, the company provides data centers and GPU computing solutions for businesses working in AI, operating through its HPC Hosting Business, Data Center Hosting Business, and Cloud Services Business segments.
APLD stock has delivered a strong performance over the past year, gaining more than 520%. In comparison, the S&P 500 ($SPX) has posted returns of around 29% during the same period. This year alone, the stock is already up 87%, and the momentum doesn't show any signs of slowing down.
www.barchart.com As with other AI stocks, much of the prospects for Applied Digital are already priced in. One way to look at this is that the market is confident the company will be able to execute perfectly on its backlog conversion. Applied Digital currently has a backlog of about $31 billion, which could possibly turn into $73 billion of realized revenue over time as deals progress. While many of its valuation multiples are quite high, the market is treating Applied Digital as a high-growth AI infrastructure play rather than an average IT company.
Applied Digital Beats Consensus Estimates
Applied Digital reported its third-quarter fiscal 2026 earnings on April 8. Revenue for the quarter came in at $126.6 million, beating market expectations by about $48 million. This represented impressive 139% year-over-year (YOY) growth.
On the earnings side, the company posted better-than-expected non-GAAP EPS of $0.09, exceeding consensus estimates by $0.30. Adjusted net income reached $33.2 million, while adjusted revenue totaled $108.6 million. The firm ended the quarter with $2.1 billion in cash, cash equivalents, and restricted cash, while debt stood at about $2.7 billion.
What Are Analysts Saying About Applied Digital Stock?
Following the company’s announcement of the 300 MW Polaris Forge 3 lease, Needham raised its price target on APLD stock from $51 to $66 on May 21 while keeping a “Buy” rating. Analysts were “pleasantly surprised” by how quickly the hyperscale customer signed additional capacity under terms similar to those at Delta Forge 1.
APLD stock holds a consensus “Strong Buy” rating from 12 Wall Street analysts with coverage. The mean price target of $56.64 implies 23% potential upside from current levels. Meanwhile, the highest price target of $99 reflects impressive potential upside of 115% from here.
www.barchart.com On the date of publication, Jabran Kundi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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