Key Takeaways
- Darren Aftahi from Roth MKM has maintained his Buy recommendation on APLD stock with a price target of $58, identifying it as his preferred investment choice.
- The upcoming Q3 FY26 results, scheduled for April 8, will mark the initial complete quarter showcasing lease revenue contributions.
- Consensus estimates point to Q3 revenue reaching approximately $75.47M, representing a ~43% annual increase, while adjusted EPS loss is projected at $0.15.
- The company has secured agreements representing 600 MW of capacity and aims to achieve roughly $1B in annual NOI within a five-year timeframe.
- NVIDIA has divested its entire position in APLD, while the company completed a $2.15B senior secured notes offering priced at 6.75%.
Applied Digital prepares to unveil its fiscal third-quarter financial results on April 8, backed by renewed support from a prominent Wall Street analyst. Darren Aftahi of Roth MKM has maintained his Buy recommendation alongside a $58 price objective, designating APLD as his preferred investment opportunity within his coverage universe.
Applied Digital Corporation, APLD
Trading at $24.49, the shares remain significantly beneath Aftahi’s target price — suggesting potential gains exceeding 130% should his investment thesis materialize.
The analyst highlighted Q3 FY26 as a pivotal moment for the company. This reporting period represents the initial full quarter incorporating lease revenue comprehensively within financial statements, offering critical insight into how the firm’s data center agreements are performing operationally.
Consensus forecasts anticipate quarterly revenue near $75.47 million, marking approximately 43% growth compared to the equivalent period last year. Regarding profitability metrics, analysts project an adjusted loss per share of $0.15, representing a wider deficit than the $0.08 loss recorded in the comparable year-ago quarter.
Aftahi noted that CoreWeave’s recent upgrade to A3 credit status could deliver positive ripple effects for Applied Digital — potentially resulting in compressed bond spreads and reduced financing expenses for APLD moving forward.
The DF1 facility located in Louisiana has commenced construction activities, with development capital from Macquarie now actively deployed. Aftahi indicated he anticipates a third hyperscaler lease announcement forthcoming, and recommended investors view any share price weakness as an attractive entry opportunity.
Applied Digital has executed capacity agreements totaling 600 MW. The organization is pursuing approximately $1 billion in annual net operating income across a five-year horizon — which Aftahi characterized as a “scalable platform.”
Capital Raise and Balance Sheet Developments
Regarding financing activities, Applied Digital recently completed a $2.15 billion issuance of senior secured notes via its APLD ComputeCo 2 LLC subsidiary. These securities feature a 6.75% coupon rate, come due in 2031, and were offered at 98 cents per dollar of face value.
The capital raised will fund construction of a 200-megawatt critical IT load facility at the Polaris Forge 2 AI data center campus located in North Dakota, alongside debt service reserve requirements and associated transaction expenses.
In related developments, Babcock & Wilcox secured a $2.4 billion agreement with Base Electron to deliver 1.2 gigawatts of new generation capacity — encompassing four 300-megawatt natural gas-fired boiler systems — designed to energize Applied Digital’s AI Factory campuses.
NVIDIA Stake Sale and Wall Street Consensus
A notable development that garnered market attention: NVIDIA has completely liquidated its ownership position in Applied Digital, according to its latest 13F regulatory disclosure. This divestiture occurred following Applied Digital’s debt offering announcement, which initially pressured share prices.
Nevertheless, the broader analyst community maintains an optimistic stance. All 10 Wall Street analysts tracking APLD hold Buy ratings, with a consensus price target of $52.22 — indicating approximately 113% potential appreciation from present trading levels.
The equity has declined 4.76% during the past week but has delivered roughly 292% returns over the trailing twelve-month period.
Market participants will monitor the April 8 earnings conference call attentively for updates regarding new lease transactions, hyperscaler partnership commitments, and management’s perspective on capital allocation strategies.
