Applied Digital shares had been declining all year before surging 85% over the last month. / Photo: X/APLDdigital

An analyst at investment bank Citizens JMP has issued a bullish call on Applied Digital, a small-cap data center developer. He expects the stock to outperform and sees 44% upside, driven by the company’s strategic pivot from bitcoin mining to data center infrastructure.

Details

Data center developer Applied Digital Corporation has received a “market outperform” rating from Citizens JMP analyst Greg Miller, as reported by the Motley Fool. Miller set a target price of $12 per share, a 44% premium to the previous day’s closing price.

The market seemed to respond to the upbeat call: Applied Digital shares rose 10% yesterday, May 22, to $7.40 per share. Over the last month, the company’s market valuation has jumped 85%.

Miller of Citizens JMP called Applied Digital’s shift from bitcoin mining to data center infrastructure a smart move. He expects the company to soon start reaping the benefits of this transformation, including signing a hyperscaler client in the very near future (while noting that this anticipated event has been delayed several times).

Last year, the stock was trading above $10 per share, but starting on December 24, it began to decline, falling below $4 per share as ofApril. Citizens JMP remains confident that Applied Digital can benefit from the growing demand for infrastructure for cloud computing and AI.

What other analysts say

According to MarketBeat, Applied Digital has a consensus “buy” rating. The average target price is $10.67 per share, implying upside of roughly 42% versus current quotes.

  • Needham & Company reaffirmed its “buy” call on April 23 at a target price of $10 per share.

  • HC Wainwright, in mid-April, also issued a “buy” recommendation but lowered its target price from $12 to $7 per share.

  • Around the same time, Cantor Fitzgerald revised downward its target price from $14 to $7 per share while maintaining its “market outperform” rating.

  • The most upbeat outlook is that of Northland Securities, which in early February assigned a “market outperform” rating and raised its target price from $12 to $20 per share, according to MarketBeat.

About the company

Applied Digital, formerly Applied Blockchain, mainly builds and operates data centers for crypto mining, especially bitcoin.

In November 2022, the company changed its name and shifted to its current focus.

For the third quarter of its 2025 fiscal year, Applied Digital reported a net loss of $0.08 per share — better than analysts’ expectations of a $0.11 per share loss — but missed revenue forecasts, posting a top line of $52.90 million versus an expected $64.96 million, according to Investing.com. Notably, the company’s data center hosting segment contributed significantly, generating $35.20 million in revenue. Overall adjusted EBITDA saw a major improvement, rising to positive $10.0 million from negative $1.2 million a year earlier.

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