HC Wainwright Raises APLD Target Price to $20, Maintains Buy Rating

HC Wainwright raised the target price for Applied Digital (APLD) to $20, maintaining a Buy rating. This follows a series of positive assessments in the past month, with analysts raising price targets and maintaining Buy ratings. APLD is a designer, developer, and operator of next-generation digital infrastructure, providing digital infrastructure solutions and cloud services to industries like High-Performance Computing and Artificial Intelligence. The average target price for APLD is $20.00, with an average brokerage recommendation of 1.9, indicating an "Outperform" status.

Investing.com - H.C. Wainwright has raised its price target for Applied Digital Inc. (NASDAQ: APLD) to $20.00, maintaining a Buy rating on the stock. This follows a series of positive assessments in the past month, with analysts raising price targets and maintaining Buy ratings. The company's stock has shown remarkable momentum, with a 252% return over the past year.

The price target increase comes on the heels of Applied Digital's August 18 announcement of plans to break ground on Polaris Forge 2 near Fargo, North Dakota, in Harwood. The new facility aims for a 280MW power capacity with an estimated $3 billion construction budget. The company's aggressive expansion plans reflect its growth strategy, with a high beta of 6.0 and revenue of $144.19 million in the last twelve months.

H.C. Wainwright noted that Applied Digital is experiencing intense demand for HPC hosting services and is in advanced negotiations with a U.S. based investment-grade hyperscaler for the new campus. The firm highlighted that Applied Digital’s success stems from its ability to reduce construction time to 12-14 months compared to the industry norm of 24 months.

The first HPC complex, Polaris Forge 1 in Ellendale, is expected to reach 400MW by 2027, with the first 100MW coming online in Q4 2025. The second building under construction should be operational by mid-2026, bringing a cumulative 250MW per the $11 billion 15-year contract with CoreWeave.

Despite the positive outlook, H.C. Wainwright indicated it was hesitant to include the Harwood’s site contribution in its estimates due to the 2026-27 construction timeline, no named customer, and no labeled financing, but expressed confidence that financing would not be an issue given the overarching state of HPC demand. InvestingPro data reveals some potential risk factors, including a current ratio of 0.77 and significant cash burn. For deeper insights into APLD’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

In other recent news, Applied Digital Corporation reported its financial results for the fourth quarter of 2025, surpassing earnings per share (EPS) expectations with a reported EPS of -$0.03 compared to the anticipated -$0.14. However, the company’s revenues fell short of forecasts, coming in at $38 million against the expected $42.07 million. Additionally, Applied Digital announced plans to break ground on a $3 billion AI data center, Polaris Forge 2, in North Dakota by September 2025. The facility is expected to have initial operations in 2026 and reach full capacity by early 2027. In another development, the company doubled its Series G preferred stock offering to $300 million, amending its preferred equity purchase agreement to support the ongoing construction of its Polaris Forge I data center. Furthermore, Craig-Hallum raised its price target for Applied Blockchain to $18.00 from $12.00, maintaining a Buy rating. This adjustment was influenced by the company’s recent 150MW expansion. These developments reflect Applied Digital’s strategic efforts to expand its infrastructure and secure additional capital for its projects.

The AI compute market is on a meteoric trajectory, projected to grow at a 19.4% compound annual growth rate (CAGR) through 2030, reaching a staggering $394.46 billion in value. Applied Digital's Polaris Forge 2 project in North Dakota aims to dominate this market with a 280MW capacity and a $3 billion investment. The project leverages the state's cold climate, renewable energy, and 85% asset ownership to deliver sustainable, low-cost AI infrastructure.

North Dakota's emergence as a hub for AI infrastructure is no accident. The state's cold climate, abundant renewable energy, and pro-business policies make it an ideal location for energy-intensive AI operations. Applied Digital's Polaris Forge 2, set to break ground in September 2025, leverages these advantages to deliver scalable, sustainable compute power.

The project's 900+ acre footprint allows for rapid expansion, with initial operations slated for 2026 and full capacity by early 2027. Once operational, it will employ over 200 full-time staff and contractors, injecting capital into rural communities while reinforcing Applied Digital's commitment to localized economic development.

Applied Digital's proprietary waterless cooling technology and modular design enable rapid deployment, with a Power Usage Effectiveness (PUE) of 1.18—well below the industry average of 1.57. This efficiency translates to lower operating costs and higher margins, critical in a market where hyperscalers demand both performance and affordability.

The Polaris Forge 2 project is a catalyst for both financial and societal returns. By 2030, the AI compute market's $394 billion valuation will require infrastructure that can scale at unprecedented rates. Applied Digital's North Dakota footprint—comprising Polaris Forge 1, 2, and expansions in Jamestown—positions it to capture a significant share of this growth.

For investors, the thesis is clear: Applied Digital is building a moat around its AI infrastructure business. Its strategic alignment with North Dakota's renewable energy resources, combined with its proprietary technology and rapid deployment capabilities, creates a flywheel effect. As the company scales, it will benefit from economies of scale in energy procurement, construction, and operations—factors that will widen margins and drive shareholder value.

Conclusion: A High-Conviction Play in the AI Era

Applied Digital's Polaris Forge 2 is more than a project—it's a blueprint for dominating the AI compute market. With a $3 billion investment, a 19.4% CAGR tailwind, and a strategic focus on sustainability and scalability, the company is poised to outperform peers in a sector where speed and efficiency are paramount. For investors seeking long-term capital appreciation, Applied Digital represents a rare combination of macro-driven growth, operational excellence, and geographic advantage. As North Dakota becomes the next frontier for AI infrastructure, Applied Digital is not just riding the wave—it's leading it.

Investment Advice: Given the company's strong commercial validation, low-cost energy access, and alignment with the AI compute market's explosive growth, Applied Digital is a high-conviction long-term hold. Investors should monitor its progress in securing additional hyperscaler partnerships and the successful execution of Polaris Forge 2's 2026 operational timeline.

References:
[1] https://www.investing.com/news/analyst-ratings/applied-blockchain-stock-price-target-raised-to-20-from-15-at-hc-wainwright-93CH-4208718
[2] https://www.ainvest.com/news/applied-digital-polaris-forge-2-catalyst-ai-infrastructure-dominance-north-dakota-2508/