Why Applied Digital Corporation (APLD) Is Skyrocketing

Applied Digital Corporation (APLD) has been making waves in the tech industry, with its stock price surging recently. The company, which designs, develops, and operates digital infrastructure solutions and cloud services for high-performance computing (HPC) and artificial intelligence industries in North America, has seen a significant increase in its stock price. But what's driving this surge, and is it sustainable? Let's dive in.



1. Investment from Macquarie Asset Management: On January 14, 2025, Macquarie Asset Management announced an investment of up to $5 billion in APLD's high-performance computing (HPC) data centers. This strategic investment, along with a 15% stake in the company, has significantly boosted investor confidence in APLD's growth prospects. The deal follows strong investor interest in businesses connected to the AI boom, indicating that APLD is well-positioned to capitalize on this trend.
2. Strong Analyst Ratings: As of January 15, 2025, 8 analysts have given APLD a "Strong Buy" rating, with an average price target of $11.88, indicating a 32.29% increase from the latest price. This consensus among analysts suggests that APLD's stock is likely to perform very well in the near future and significantly outperform the market.
3. Revenue and EPS Growth: APLD is forecast to grow earnings and revenue by 23.6% and 32.5% per annum, respectively, while EPS is expected to grow by 45.2% per annum. These growth rates are significantly higher than the industry average, indicating that APLD is poised for strong financial performance in the coming years.
4. Expansion and Growth Initiatives: APLD has been actively expanding its HPC data center hosting business and cloud services business. The company has added two additional clusters to its cloud services business, increasing the total to six clusters, each containing 1,024 GPUs. Additionally, APLD is finalizing a lease agreement with a U.S.-based hyperscaler for its 100 MW facility in Ellendale, North Dakota, further driving growth in this segment.
5. Strategic Partnerships and Lease Agreements: APLD has been pursuing strategic partnerships and lease agreements with major hyperscalers. These partnerships and agreements, along with the company's strong financial performance and growth prospects, have contributed to the recent surge in APLD's stock price.



In conclusion, APLD's recent stock price surge can be attributed to several factors, including the strategic investment from Macquarie Asset Management, strong analyst ratings, revenue and EPS growth, expansion and growth initiatives, and strategic partnerships and lease agreements. With a strong focus on the high-performance computing and artificial intelligence industries, APLD is well-positioned to capitalize on the growing demand for these services. As the company continues to execute on its growth strategy, investors can expect to see further upside in APLD's stock price.