Compass Point Raises Price Target on Applied Digital (APLD) Following Major AI Data Center Lease Agreement

Applied Digital Corp (NASDAQ: APLD ) ranks among the best short squeeze stocks to invest in . Compass Point boosted its price target for Applied Digital Corp (NASDAQ:APLD) to $70 from $45 on May 22, with a Buy rating, following the company’s announcement of a major data center lease contract.

Applied Digital Corp (NASDAQ:APLD) signed a 15-year take-or-pay contract for 300MW of essential IT load at Polaris Forge 3, its fourth AI Factory campus, with a high-investment-grade hyperscaler based in the US. The same client had signed Delta Forge 1 earlier in April.

The agreement increases base-term contracted revenue by about $7.5 billion. Overall, Applied Digital’s contracted essential IT load grew from 900MW to 1.2 GW, and its baseline contracted revenue across four campuses has risen to $31 billion.

The company has already obtained a $300 million senior secured bridge loan sponsored by Goldman Sachs in order to finance the construction of its third AI data center at Polaris Forge 1 in North Dakota. Applied Digital Corp (NASDAQ:APLD) stated that it intends to look for more funding to finish the project.

Applied Digital Corp (NASDAQ:APLD) builds and operates digital infrastructure for AI and computing companies in North America. The company provides data centers and GPU computing solutions for businesses working in AI. It is headquartered in Dallas, Texas, and was founded in 2021 by Wes Cummins and Jason Zhang.

While we acknowledge the potential of APLD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock .

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years