Update shared on22 Aug 2025
Fair value Increased 8.87%Applied Digital’s consensus price target has been raised to $18.75, reflecting the multi-billion dollar Ellendale lease with CoreWeave, expanding customer momentum, and favorable market comps that highlight undervalued datacenter assets.
Analyst Commentary
- Full execution of the 400MW Ellendale lease to CoreWeave, representing a multi-billion dollar, long-term revenue stream and enhancing earnings visibility.
- Momentum in customer acquisition and market positioning, including ongoing advanced contract discussions with additional hyperscale clients, suggesting further pipeline potential.
- Re-evaluation of valuation methodologies on existing and prospective high-performance computing sites, factoring in expansion to additional sites in North Dakota and South Dakota.
- Favorable private market transactions in the datacenter space, indicating Applied Digital’s assets may be undervalued by the public market relative to cap rates and transaction multiples.
- Bullish analysts see increased stability and demand for Applied Digital’s services, driven by credible counterparties and expanded strategic relationships.
What's in the News
- Announced plans to build Polaris Forge 2, a $3 billion, 280MW AI Factory in North Dakota with scalable capacity, expanding infrastructure to address surging AI compute demand.
- Entered two 15-year lease agreements with CoreWeave to deliver 250MW of IT load at the Ellendale campus, with about $7 billion expected revenue and additional 150MW expansion options.
- Launched an infrastructure partnership with ABB utilizing advanced medium voltage UPS technology at the 400MW North Dakota campus to boost efficiency and reliability for AI workloads.
- Established a partnership with BASX to develop a customized, energy-efficient, waterless cooling system for the Polaris Forge 1 AI factory.
- Appointed CBIZ CPAs as new independent auditor after the firm acquired Marcum LLP’s attest business; also filed a $200 million at-the-market follow-on equity offering.
Valuation Changes
Summary of Valuation Changes for Applied Digital
- The Consensus Analyst Price Target has risen from $17.22 to $18.75.
- The Future P/E for Applied Digital has risen from 70.51x to 76.54x.
- The Discount Rate for Applied Digital remained effectively unchanged, moving only marginally from 9.34% to 9.23%.
Disclaimer
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