Applied Digital announced $5.2 billion infrastructure build deal with major hyperscaler following record deployment pace.

Applied Digital Corp.'s latest hyperscaler deal has sent a wave of optimism through Wall Street, with multiple analysts raising their price targets following the company's announcement of a $5.2 billion infrastructure agreement.

Needham raised its price target for Applied Digital to $83 from $66, maintaining a "Buy" rating on the stock and expressing that it is "pleasantly surprised" by the pace of the company's AI infrastructure buildout. The new price target implies approximately 78% upside potential from current levels. Needham stated that it believes Applied Digital can continue to source new sites for its AI Factory campus pipeline and execute additional leases with major clients.

Lake Street also raised its price target to $90 from $70 and maintained a "Buy" rating following the hyperscaler lease announcement. The firm noted that the $5.2 billion agreement increases Applied Digital's total contracted revenue backlog to roughly $36 billion, representing approximately $2.4 billion in annualized revenue. Lake Street described the pace of contract wins as "strong progress," highlighting the company's continued ability to secure additional capacity commitments from major customers.

Craig-Hallum raised its price target on Applied Digital to $79 from $75 and reiterated a "Buy" rating, noting that it remains impressed by the company's "flywheel" effect. The company now has five lease agreements and 1.4 gigawatts of contracted capacity across its AI infrastructure portfolio.

In related financing news, Applied Digital announced that its subsidiary, APLD ComputeCo 3, plans to offer $1.59 billion of senior secured notes due 2031 in a private placement. The company intends to use the proceeds to fund construction of 150 megawatts of critical IT capacity at the ELN-04 building at its Polaris Forge 1 campus in North Dakota, repay a Goldman Sachs bridge loan facility, fund debt service reserves, and cover transaction expenses.

Applied Digital shares surged nearly 14% in Tuesday's opening trade, with APLD among the top trending tickers. Retail sentiment on Stocktwits remained bullish with high message volumes. The stock is up 87% year-to-date and 252% over the past 12 months.