Applied Digital Corporation experienced a dramatic 25.5% rally on Friday, closing the trading session at $34.95. The stock witnessed significant volatility throughout the day, swinging from a low of $27.16 to a peak of $35.08, with trading volume reaching approximately 44.7 million shares.
AI Infrastructure Sector Rebounds
The surge reflects a broader resurgence in artificial intelligence infrastructure investments, as market participants renewed their focus on companies supporting cloud and computing demand. This movement outpaced gains in sector peers, with Core Scientific advancing 13.6% and Digital Realty climbing roughly 4% during the same session.
Applied Digital operates data centers and colocation facilities serving artificial intelligence, high-performance computing, and blockchain applications. The company's latest quarterly filing revealed $126.6 million in revenue for the period ending November 30, alongside approximately $2.3 billion in cash and equivalents against $2.6 billion in debt.
Strategic Expansion and Analyst Outlook
The company has secured significant leasing agreements, including a total of 600 megawatts with two hyperscale clients. In October, Applied Digital announced a roughly 15-year lease at its Polaris Forge 2 facility in North Dakota, providing 200 MW of IT capacity to an investment-grade hyperscaler with first refusal rights for an additional 800 MW.
Management continues expansion efforts, having broken ground on the Delta Forge 1 AI Factory campus in the southern United States in January. The facility is designed to utilize up to 430 MW of utility power at full capacity, with its initial phase expected to become operational by mid-2027.
Analysts remain focused on leasing negotiations, with Northland's Mike Grondahl raising his price target to $56 from $40 while maintaining an Outperform rating. He cited advanced discussions with an investment-grade hyperscaler potentially covering up to three sites and 900 MW of capacity.
Market participants will monitor upcoming economic data, including postponed U.S. employment figures on Wednesday and the Consumer Price Index on Friday, which may influence rate expectations and impact capital-intensive growth stocks like data center operators.
