Applied Digital Corporation (NASDAQ: APLD) received a reiterated Buy rating and a $66 price target from Needham analyst John Todaro on May 28.
Todaro cited strong multi-year growth visibility as the foundation of his bullish stance, following direct conversations with Applied Digital’s management team.
The analyst’s core thesis centers on a 1.7 gigawatt development pipeline that is spread across three separate campuses, representing significant long-term capacity.
Strong power deliveries are expected to begin arriving from late 2027 and continue into 2028, according to Todaro’s assessment of the company’s infrastructure roadmap.
Todaro believes this pipeline positions Applied Digital to capture sustained demand from the artificial intelligence and data center sectors over an extended horizon.
Customer diversification was also flagged by the analyst as a meaningful risk-reduction factor that strengthens the company’s overall investment case.
By expanding its customer base beyond a single hyperscaler, Applied Digital is targeting investment-grade revenues of 70%, a threshold Todaro views as a significant credit quality indicator.
Based on this combination of factors, the analyst considers Applied Digital an attractive stock at its current valuation levels relative to peers.
Despite the bullish analyst coverage, Applied Digital carries a high short float ratio of roughly 29.9%, reflecting meaningful skepticism among bearish market participants.
Wall Street’s 12-month average price target nonetheless suggests more than 50% upside from current trading levels, pointing to a wide divergence between analyst expectations and short-seller positioning.
The stock was up 2.84% at the time of reporting, with broader market interest in AI infrastructure names continuing to support sentiment around data center operators.
Applied Digital’s expanding power pipeline and diversification strategy appear to be the central pillars underpinning Needham’s continued confidence in the stock heading into the second half of 2026.
