What Happened?
Shares of digital infrastructure provider Applied Digital (NASDAQ: APLD) jumped 3.1% in the morning session after H.C. Wainwright increased its price target on the stock to $20 from $15 while maintaining a Buy rating.
The analyst firm highlighted the company's strong momentum, noting "intense demand for HPC hosting services." This demand is the driving force behind Applied Digital's plan to begin construction next month on a new 280MW facility, Polaris Forge 2, in North Dakota. According to H.C. Wainwright, the company is also in "advanced negotiations with a U.S. based investment-grade hyperscaler" for the new campus. This positive sentiment is echoed more broadly on Wall Street, where the mean price target of $20 suggests a potential 25.4% upside from the previous day's close, supported by analysts revising their earnings per share estimates higher. The company is also scheduled to present at the Gateway Conference in early September.
After the initial pop the shares cooled down to $16.31, up 2.2% from previous close.
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What Is The Market Telling Us
Applied Digital’s shares are extremely volatile and have had 101 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 3.2% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium.
Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Applied Digital is up 109% since the beginning of the year, and at $16.31 per share, it is trading close to its 52-week high of $16.34 from August 2025. Investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $271,838.
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