Applied Digital (NASDAQ:APLD) stock is on the move today, up by 20% at the time of writing, and not for the first time over the past year. Shares of the AI infrastructure firm have added 483% over the last 12 months, with the company seeing massive benefits from the AI boom.
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APLD has a long & short ETF? Explore APLX & APLZThe latest uptick came after Applied announced it has secured a new 15-year take-or-pay lease at its fourth AI Factory campus, Polaris Forge 3, with the same U.S.-based, “high” investment-grade hyperscaler that it contracted with at Delta Forge 1 roughly four weeks earlier. The agreement represents approximately $7.5 billion in base-term contracted value and about $18.2 billion when including renewals.
The deal increases Applied’s total contracted lease revenue to $31 billion across four sites, rising to roughly $73 billion including renewals, and brings contracted critical IT load to 1,200 MW. Investment-grade hyperscalers now account for about 65% of contracted revenue, up from over 50% following Delta Forge 1. Polaris Forge 3 is situated in a northern state, with operations expected to begin in the second half of 2027.
The announcement has been positively received across Wall Street, with a slew of top analysts raising their price targets.
Craig Hallum’s George Sutton, an analyst ranked among the top 2% on Wall Street, notes that although the company had previously stated that 700 MW was being marketed, this figure has now increased to 1.7 GW, representing an effective 1.3 GW rise after accounting for the 300 MW that has recently shifted into the contracted category. With 1.2 GW now under contract, the key constraint increasingly appears to be the pace at which new sites can be developed, rather than the ability to secure additional leases.
“We are not surprised to see this tenant coming back for additional capacity in such short order given the ferocious demand environment and view it as a testament to Applied’s ability to navigate the increasingly challenging supply side of the market better than almost anybody,” the 5-star analyst said.
As such, Sutton maintained a Buy rating on the shares and raised his price target from $46 to $51, implying the stock will gain another 8% over the coming months. (To watch Sutton’s track record, click here)
Needham’s John Todaro also likes the deal and is “pleasantly surprised” by how fast the customer signed additional capacity. Todaro, who is rated in the top 1% of Street stock experts by TipRanks, believes that Base Electron, the independent power producer founded by Applied Digital executives, could “materially add power down the road.”
The 5-star analyst maintained a Buy here too, and raised his price target from $51 to $66, a figure that factors in one-year gains of 40%. (To watch Todaro’s track record, click here)
Lake Street’s Robert Brown, who also ranks among the top 1% of Street stock pros, reiterated a Buy rating and raised his target from $55 to $70, suggesting shares will rise by another 48% over the next 12 months. “The demand environment remains strong, and we believe Applied can show additional traction,” the 5-star analyst went on to say. “With this contract, we believe Applied is on track to reach its goal of $2 billion in NOI as additional leases are signed.” (To watch Brown’s track record, click here)
All other Street analysts are getting behind this name too; based on a unanimous 8 Buys, the stock naturally claims a Strong Buy consensus view. Going by the $58.29 average price target, a year from now shares will be changing hands for a 24% premium. (See APLD stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.