TLDR
- Applied Digital (APLD) stock fell 4.61% to $12.60 after dropping 6.06% on Monday to $13.02 as investors took profits
- Despite recent declines, the stock remains up 124% over the past month and 181% over the past year
- The company secured two 15-year lease contracts with CoreWeave for 250 MW of data center capacity at its North Dakota facility
- 12 analysts have mixed ratings with 8 bullish, 3 somewhat bullish, and 1 neutral, with average price target of $11.50
- First 100 MW of data center capacity expected to come online in Q4 2025, with remaining 150 MW by mid-2026
Applied Digital Corporation stock faced selling pressure this week as investors cashed in on massive gains. The data center operator closed at $12.60 on Tuesday, down 4.61% from the previous session.
The decline followed Monday’s 6.06% drop to $13.02. Trading charts showed consistent downward pressure throughout both sessions as profit-taking dominated investor sentiment.
Despite the recent weakness, Applied Digital’s stock performance remains extraordinary. The shares have surged 124% over the past month alone.
The stock is also up 18% over the past five days, even accounting for this week’s declines. Year-to-date gains stand at 57%, while the 12-month return reaches 181%.
CoreWeave Partnership Drives Growth
Applied Digital’s recent rally stems from a major partnership announcement with CoreWeave. The company signed two 15-year lease agreements to provide 250 megawatts of critical IT load capacity.
The contracts cover Applied Digital’s Ellendale, North Dakota data center campus. CoreWeave will use the space to host artificial intelligence and high-performance computing infrastructure.
CoreWeave also secured options for an additional 150 MW of capacity at the same location. This positions Ellendale as a scalable hub for expanding AI workloads.
The first 100 MW of data center capacity will come online in the fourth quarter of 2025. Applied Digital expects the remaining 150 MW to be operational by mid-2026.
Monday’s selling suggests investors had already priced in the CoreWeave news. Market participants now appear to be waiting for additional catalysts to drive further gains.
Analyst Sentiment Remains Positive
Wall Street analysts maintain largely positive views on Applied Digital despite the recent volatility. Twelve analysts have issued ratings in the past three months.
Eight analysts rate the stock as bullish, while three maintain somewhat bullish stances. Only one analyst holds a neutral rating, with no bearish or somewhat bearish recommendations.
The average 12-month price target sits at $11.50, representing a slight discount to current levels. Price targets range from a low of $7.00 to a high of $18.00.
This average target represents an 11% increase from the previous consensus of $10.36. Several analysts have raised their price targets following recent company developments.
JMP Securities analyst Greg Miller raised his target to $18.00 from $12.00. B. Riley Securities lifted its target to $15.00 from $8.00, while HC Wainwright increased theirs to $12.00 from $7.00.
The company’s five-year return stands at an impressive 27,360%, highlighting its transformation from a struggling entity. However, the all-time performance remains negative at -11.58%, indicating the stock has recovered from previous lows.
Applied Digital generates most of its revenue from its Data Center Hosting Business, which provides energized space to cryptocurrency mining customers. The company also operates Cloud Services and HPC Hosting segments.
The company reported 22.08% revenue growth in its most recent quarter ending February 28, 2025. However, profitability remains challenging with a net margin of -68.21% and return on equity of -8.12%.
Applied Digital maintains a debt-to-equity ratio of 2.19, which sits below industry averages. This reflects a more conservative financial approach compared to sector peers.
