Shares of power-dense, artificial intelligence (AI)-focused data center developer and operator Applied Digital (APLD 3.77%) have soared by over 236% so far in 2025. However, many analysts still expect the stock to continue its upward trajectory.
The most bullish among them is Roth MKM analyst Darren Aftahi, who raised the target price for this AI infrastructure stock from $43 to $56 while also reiterating his buy rating. Here's why.
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Exceptional demand visibility
Applied Digital has already fully contracted its 400 megawatts of data center capacity at Polaris Forge 1 campus in Ellendale, North Dakota, with hyperscaler CoreWeave under a long-term lease valued at around $11 billion over 15 years. Management also expects to scale the capacity at this campus beyond one gigawatt from 2028 to 2030, once additional electricity becomes available.
NASDAQ: APLD
Key Data Points
In late November 2025, Applied Digital announced that its first 100-megawatt building at the Polaris Forge 1 campus is now ready for service. This marks the company's transition from data center construction to recurring revenue generation activities. Management expects the CoreWeave lease to contribute $0.5 billion in annual net operating income (NOI) once fully ramped.
Management expects the 300-megawatt Polaris Forge 2 campus in North Dakota to begin entering service in late 2026, with full operations targeted in 2027. But the risk of unsold capacity at this campus is already low, as Applied Digital has already signed a $5 billion, 15-year lease with a U.S.-based hyperscaler covering 200 megawatts of capacity. With Polaris Forge 1 and Forge 2 ramping, the company expects to reach its long-term target of a $1 billion NOI run rate within the next five years.
With AI-ready data center capacity and not GPUs proving to be the primary bottleneck in AI infrastructure buildout, Applied Digital seems well positioned to benefit from sustained hyperscaler demand and strong long-term cash flow visibility.
Investors can consider picking up a small stake in this stock before it sees a meaningful share price appreciation.
