Lake Street analyst Rob Brown has maintained a Buy rating on Applied Digital and increased the stock's price target to $90 from $70. The adjustment reflects a revised outlook on the company's valuation and growth potential.

Rating and Price Action

The research note highlights confidence in Applied Digital's business trajectory. The new price target of $90 represents an increase from the previous target of $70.

The company is listed on the NASDAQ under the ticker symbol APLD.

Applied Digital has entered into a new long-term lease agreement at Delta Forge 2, a purpose-built AI Factory campus located in a southern state, representing approximately $5.2 billion in base-term contracted revenue. The lease is with a U.S. based high investment-grade hyperscaler, marking the company's fifth AI Factory campus overall and its third agreement with this specific customer. This agreement covers 210 MW of critical IT load under a 15-year take-or-pay structure with renewal options, representing approximately $12.7 billion if all renewal options are exercised over a 30-year total term. Initial operations at Delta Forge 2 are anticipated to commence in Q1 2028.

Applied Digital also announced a proposed offering of $1.59 billion in senior secured notes due 2031 through its subsidiary APLD ComputeCo 3 LLC. The proceeds will be used primarily to fund construction of 150 MW of critical IT load at the fourth building at Polaris Forge 1 in Ellendale, North Dakota, as well as to repay an existing Goldman Sachs bridge loan and cover transaction expenses. The offering is subject to market conditions and is being made in a private placement to qualified institutional buyers.

With the Delta Forge 2 agreement, Applied Digital's contracted portfolio spans five AI Factory campuses, representing 1.4 GW of critical IT load, approximately 2.15 GW of grid-connected utility power, and approximately $36 billion in total contracted base-term lease revenue, or $86 billion if all renewal options are exercised. Approximately 70% of contracted revenue is now backed by U.S. based investment-grade hyperscalers. The company's franchise model is now active across northern and southern geographies, integrating proprietary waterless cooling technology and high-power density infrastructure.

Contracted Portfolio Overview

Recent Performance

The announcement comes after a remarkable stretch of deal activity, including a $7.5 billion lease signed at Polaris Forge 3 late last month. Shares of Applied Digital have surged over 180% in the past 12 months. Following the news, shares were trading 10.98% higher at $45.44. "Two years ago, we made a deliberate decision to build a company that scales, not just builds data centers," said Wes Cummins, chairman and CEO of Applied Digital.