Applied Digital (APLD) shares soared on Jan. 8 after the artificial intelligence (AI) infrastructures company said its revenue more than tripled to about $127 million in the second quarter.
On the earnings call, the Nasdaq-listed firm reiterated its recently secured $5 billion hyperscaler lease, reinforcing its position as a major provider of large-scale data center capacity.
Including today’s gains, Applied Digital stock is trading at about 9x its price last April.
Why Applied Digital Stock May Push Higher in 2026
While APLD stock has already had a meteoric run, it’s reasonable to expect more from this Dallas-headquartered firm due to several reasons.
For starters, the artificial intelligence infrastructure specialist has onboarded just two U.S. hyperscalers so far. So, the room for expansion is truly enormous on that front.
Even without new clients, these two existing lease agreements are already worth about $16 billion, offering significant visibility into future revenue.
On Thursday, Applied Digital said its net operating income (NOI) will surpass $1.0 billion by the end of this decade, which makes it even more attractive as a long-term holding.
History Suggests APLD Shares Will Climb Further
In Q2, Applied Digital also hit a key “profitability” milestone that removes a major overhang from its stock.
According to the company’s press release, its earnings broke even on an adjusted basis in the fiscal second quarter, reinforcing the management’s commitment to sustainable growth.
At the time of writing, Applied Digital shares are trading at a price-to-sales (P/S) multiple of about 58x, which isn’t particularly stretched for a business strongly positioned to ride AI tailwinds.
In the near term, the AI infrastructure firm remains worth owning also because historically (over the past four years), it has rallied over 26% on average in February.
This seasonal pattern further strengthens the case for continued upside over the next few weeks.
Applied Digital Remains a Wall Street Favorite
Investors could also take heart in the fact that Wall Street analysts remain bullish as ever on APLD shares for the next 12 months.
The consensus rating on Applied Digital stock sits at “Strong Buy” currently with the mean target of about $42 indicating potential upside of another 30% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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