Update shared on11 Sep 2025
Fair value Increased 3.23%Analysts raised Applied Digital’s price target to $20.00, citing long-term revenue visibility from major lease agreements, expanding datacenter footprint, undervalued shares versus peers, and growing demand from hyperscale customers.
Analyst Commentary
- Bullish analysts highlight Applied Digital's successful 400MW lease at Ellendale to CoreWeave, bringing substantial long-term revenue visibility (estimated at ~$11B over 15.5 years).
- Price target hikes reflect a revised valuation methodology considering the company's expanded high-performance computing footprint, including two additional sites in North Dakota and one in South Dakota.
- Recent private datacenter transactions have set higher valuation multiples and favorable cap rates, leading analysts to believe Applied Digital's shares are undervalued relative to pure-play peers.
- The exercise of option by CoreWeave for a third data center building further supports increasing operational momentum and customer diversification.
- Management's advanced contract discussions with potential hyperscale customers add confidence in strengthening market position and sustained demand for Applied Digital’s services.
What's in the News
- Applied Digital finalized a new lease agreement with CoreWeave for an additional 150MW at Polaris Forge 1 Campus, raising total anticipated contracted lease revenue to approximately $11 billion.
- The company plans to break ground on Polaris Forge 2, a $3 billion, 280MW AI Factory near Harwood, ND, set for initial capacity in 2026 and full capacity in early 2027, expanding its footprint in high-performance AI infrastructure.
- Applied Digital partnered with BASX to install a customized, zero-water free cooling chiller system at Polaris Forge 1, enhancing energy efficiency and sustainability for high-density AI workloads.
- CBIZ CPAs replaced Marcum LLP as Applied Digital’s independent auditor following CBIZ’s acquisition of Marcum’s attest business, effective for the fiscal year ended May 31, 2025.
Valuation Changes
Summary of Valuation Changes for Applied Digital
- The Consensus Analyst Price Target has risen slightly from $19.38 to $20.00.
- The Future P/E for Applied Digital has risen slightly from 79.41x to 81.95x.
- The Discount Rate for Applied Digital remained effectively unchanged, moving only marginally from 9.27% to 9.37%.
Disclaimer
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