Applied Digital deal brings focus on HPC data center, says Citizens

Citizens keeps an Outperform rating on Applied Digital (APLD) with a $40 price target after the company entered into a non-binding term sheet to spin out its cloud computing business, Applied Digital Cloud, and combine it with Ekso Bionics Holdings (EKSO). The transaction advances Applied Digital’s focus on high performance compute data center development while creating a dedicated platform for compute positioned to capture incremental demand for AI infrastructure, the analyst tells investors in a research note. Citizens believes the deal will allow Applied Digital to focus on improving equity returns in its core colocation business.