Applied Digital: Early-Mover AI Infrastructure Leader with Robust Capacity Pipeline Supports Buy Rating

Analyst John Todaro from Needham maintained a Buy rating on Applied Digital Corporation and keeping the price target at $41.00.

John Todaro has given his Buy rating due to a combination of factors tied to Applied Digital’s growth pipeline and execution capability. He highlights that the company has already energized the first 100 MW at its PF1 site for CoreWeave and expects the full 400 MW build-out there by 2027, supporting visible, multi‑year revenue expansion. In addition, Applied Digital is in advanced talks with a large hyperscale client for roughly 900 MW across three southern facilities, creating several potential near‑term contract and capacity catalysts. Management’s commentary that customer demand remains robust, pricing terms are steadily improving, and that major technology players are increasingly competing for AI compute further underpins a constructive outlook.

Todaro also emphasizes operational execution and scalability as key pillars of his positive view. Management reiterated that they can add 600–700 MW of capacity annually and have already demonstrated on-time delivery for the initial 100 MW phase, which reinforces confidence in their ability to meet future project deadlines. Applied Digital’s early-mover positioning in high‑power AI infrastructure and its receipt of over 100 inbound inquiries for developing “stranded power” sites suggest a deep pipeline of potential new locations. Finally, existing supplier and manufacturer agreements that help limit project risk, combined with the company’s relative advantage versus peers in building and operating large-scale power capacity for AI workloads, support Todaro’s Buy recommendation on the stock.

In another report released on January 13, Northland Securities also maintained a Buy rating on the stock with a $40.00 price target.