Applied Digital Corporation witnessed a dramatic 25.5% rally on Friday, closing the trading session at $34.95. The stock experienced significant volatility, swinging from an intraday low of $27.16 to a high 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 appetite for data center and high-performance computing assets. This momentum outpaced gains in sector peers such as Core Scientific, which advanced 13.6%, and data-center real estate investment trusts like Digital Realty and Equinix, which posted gains of roughly 4% and 5%, respectively.
Financial Performance and Strategic Leases
In its latest quarterly report, Applied Digital disclosed revenue of $126.6 million for the period ending November 30. The company holds about $2.3 billion in cash and equivalents against debt of approximately $2.6 billion. A key driver for investor optimism has been the signing of major data center leases totaling 600 megawatts with two hyperscale clients—large cloud service providers that operate vast server networks.
Strategic developments include a 15-year lease at its Polaris Forge 2 facility in North Dakota, securing 200 megawatts of IT capacity with an investment-grade hyperscaler, which also obtained first refusal rights for an additional 800 megawatts. Furthermore, construction has commenced on the Delta Forge 1 AI Factory campus in the southern United States, a project designed to utilize up to 430 megawatts of power at full scale, with its initial phase expected to become operational by mid-2027.
Analyst Outlook and Market Dynamics
Analysts are closely monitoring the company's leasing negotiations. Northland analyst Mike Grondahl recently raised his price target on the stock to $56 from $40, maintaining an Outperform rating, citing advanced discussions with an investment-grade hyperscaler that could encompass up to three sites and 900 megawatts of capacity. However, the stock carries notable risks, including substantial short interest—nearly 86.25 million shares, or about 33.55% of the public float, as of mid-January—which can exacerbate price movements.
Investor attention now shifts to upcoming economic data, with postponed U.S. jobs figures due Wednesday and the Consumer Price Index scheduled for Friday. These releases could influence interest rate expectations, a critical factor for capital-intensive growth stocks like data center developers.
