Key Highlights
- Darren Aftahi from Roth MKM maintains Buy rating on APLD with $58 price target, designating it his “top pick.”
- The upcoming Q3 FY26 report scheduled for April 8 represents the initial complete quarter featuring lease revenue.
- Analyst consensus projects Q3 revenue at approximately $75.47M, reflecting ~43% growth year-over-year, alongside an adjusted loss per share of $0.15.
- The company has secured agreements totaling 600 MW of capacity, with goals to achieve approximately $1B in annualized NOI within five years.
- NVIDIA has divested its position in APLD, while the company completed a $2.15B senior secured notes offering priced at 6.75%.
Applied Digital approaches its fiscal third-quarter earnings release scheduled for April 8 with renewed analyst support. Darren Aftahi from Roth MKM has maintained his Buy rating alongside a $58 price target on the shares, designating APLD as his “top pick” among coverage names.
Applied Digital Corporation, APLD
Trading at $24.49, the shares remain substantially below that target level — representing potential upside exceeding 130% should Aftahi’s investment thesis materialize.
The analyst highlighted Q3 FY26 as an inflection point. This quarter will mark the first time lease revenue appears in full within the financial statements, offering investors meaningful insight into how the company’s data center agreements are performing.
Consensus estimates call for quarterly revenue around $75.47 million, representing approximately 43% growth versus the comparable year-ago period. Regarding profitability, analysts anticipate an adjusted loss per share of $0.15, expanding from the $0.08 loss recorded in the prior-year quarter.
Aftahi noted that CoreWeave’s recent A3 credit upgrade may provide indirect benefits to Applied Digital — potentially resulting in tighter bond spreads and reduced borrowing costs for APLD.
The DF1 facility located in Louisiana has commenced construction, with development financing from Macquarie currently being utilized. Aftahi indicated expectations for a third hyperscaler lease announcement, suggesting any share price weakness presents an attractive entry point.
Applied Digital has executed capacity agreements spanning 600 MW. The company aims to generate approximately $1 billion in annualized net operating income over a five-year timeframe — characterized by Aftahi as a “scalable platform.”
Capital Raising and Financing Structure
On the financing front, Applied Digital recently completed a $2.15 billion offering of senior secured notes via its subsidiary APLD ComputeCo 2 LLC. The notes feature a 6.75% interest rate, carry a 2031 maturity date, and were issued at 98 cents on the dollar.
The raised capital will fund development of a 200-megawatt critical IT load facility located at the Polaris Forge 2 AI data center campus in North Dakota, along with debt service reserves and associated transaction expenses.
In a related development, Babcock & Wilcox secured a $2.4 billion contract with Base Electron to deliver 1.2 gigawatts of new generation capacity — encompassing four 300-megawatt natural gas-fired boiler systems — designed to power Applied Digital’s AI Factory campuses.
NVIDIA Divestiture and Wall Street Outlook
One notable development: NVIDIA has completely divested its position in Applied Digital, according to its latest 13F filing. This exit followed Applied Digital’s debt offering announcement, which initially pressured the stock.
The broader analyst community maintains a positive stance. All 10 Wall Street analysts tracking APLD hold Buy ratings, with a mean price target of $52.22 — suggesting approximately 113% upside from present levels.
The shares have declined 4.76% during the past week while delivering roughly 292% returns over the trailing year.
Market participants will monitor the April 8 earnings call for guidance on new lease agreements, hyperscaler partnerships, and management’s perspective regarding capital allocation strategy.
