Applied Digital Stock Surges on Analyst Upgrades and Ambitious AI Expansion

Shares of Applied Digital (APLD) are attracting significant attention from Wall Street following substantial price target increases from two prominent analyst firms. This renewed optimism stems from the company’s ambitious multi-billion dollar expansion within the AI data center sector, despite recent quarterly results presenting a mixed financial picture.

Wall Street Firms Raise Price Targets Substantially

The company received a major vote of confidence from H.C. Wainwright, which reaffirmed its Buy rating while lifting its price target to $20 from $15. This move followed a similar upgrade by Craig-Hallum, which also maintained a Buy recommendation while increasing its target to $18 from $12. These revised projections reflect growing institutional belief in Applied Digital’s long-term growth strategy and its positioning within the high-demand AI infrastructure market.

Massive AI Data Center Project Drives Optimism

The primary catalyst behind this bullish sentiment is Applied Digital’s announcement of a massive $3 billion AI data center project in North Dakota. Scheduled to commence construction in September 2025, the facility—dubbed “Polaris Forge 2″—is expected to become operational in 2026 and reach full capacity by early 2027. This new development will complement the company’s existing “Polaris Forge I” project currently under construction.

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To support this aggressive expansion, Applied Digital has taken decisive financial action by doubling its Series G Preferred Stock offering to $300 million. These newly acquired funds are specifically earmarked for the development of Polaris Forge I, demonstrating the company’s commitment to funding its growth initiatives.

Quarterly Results Show Divergent Performance Trends

The company’s most recent fourth-quarter 2025 financial results revealed both strengths and challenges. Applied Digital delivered a significant earnings surprise, reporting a loss of $0.03 per share compared to analyst expectations of a $0.14 per share loss. However, the company fell short on revenue, generating $38 million against projections of $42.07 million.

This financial performance highlights the company’s current transitional phase: while demonstrating improved cost efficiency, it simultaneously faces headwinds in revenue growth. The critical question for investors is whether Applied Digital’s substantial data center investments will ultimately generate sufficient returns to overcome these near-term revenue challenges and capitalize on the expanding AI infrastructure market.