Roth MKM analyst Darren Aftahi maintained a Buy rating on Applied Digital Corporation (APLD – Research Report) today and set a price target of $13.00.
Darren Aftahi has given his Buy rating due to a combination of factors surrounding the strategic decisions of Applied Digital Corporation (APLD). The sale of APLD’s Garden City facility to Marathon Digital represents not just a liquidity event but also a shift in focus towards high-performance computing (HPC) and artificial intelligence (AI), which are considered to have more favorable long-term economics. Despite the facility sale representing a sizeable portion of APLD’s operational power, Aftahi interprets this move as a necessary strategy to bridge financing gaps and advance the company’s HPC/AI initiatives, which are integral to the company’s growth narrative and stock value.
Additionally, Aftahi believes that the disposal of the asset, although at a discount, is part of a larger, more strategic plan to align with the financing for APLD’s North Dakota HPC datacenter. The analyst perceives the need for capital to maintain momentum and meet timelines as critical, given recent operational challenges and potential risks of further delays. The shift away from Bitcoin (BTC) hosting towards AI/HPC is seen as a positive step, despite the initial loss of a steady revenue stream, as the long-term operating income from AI/HPC is projected to be more lucrative than that of BTC hosting. This strategic redirection is expected to position APLD favorably for future growth, substantiating Aftahi’s Buy rating.
In another report released yesterday, Lake Street also maintained a Buy rating on the stock with a $19.00 price target.
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Applied Digital Corporation (APLD) Company Description:
Applied Science Products, Inc. operates as a technology company, which engages in the development of patented technology such as tailored plasma gas chemistry for a wide range of applications. The company was founded in May 2001 and is headquartered in Lenoir City, TN.
Read More on APLD:
- Applied Digital Announces Agreement to Sell Garden City Campus to Marathon Digital Holdings
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- Applied Digital Provides Update on Anchor Tenant at Ellendale HPC Facility
