Applied Digital, a developer and operator specializing in power-dense data centers tailored for artificial intelligence workloads, has observed an impressive rise in its share price, climbing over 236% so far in 2025. Despite the substantial increase, several financial analysts maintain a positive outlook on the stock's potential for additional value appreciation.
Darren Aftahi, an analyst at Roth MKM, embodies this bullish sentiment. He recently raised Applied Digital's price target from $43 to $56 while reiterating his buy rating. The rationale behind this optimistic assessment centers on the company's strong demand visibility and contracted revenue streams.
Applied Digital's Polaris Forge 1 campus in Ellendale, North Dakota, currently has its entire 400-megawatt data center capacity fully leased. The lead tenant, hyperscale cloud provider CoreWeave, is engaged under a long-term agreement valued at approximately $11 billion over 15 years. Management anticipates expanding total capacity at this site beyond one gigawatt sometime between 2028 and 2030, contingent on the availability of additional electrical power.
The company's recent milestones include the announcement in late November 2025 that the first 100-megawatt building within Polaris Forge 1 has become operational. This development signifies a transition from capital-intensive data center construction to generating stable, recurring revenues. Aftahi's report emphasizes the substantial net operating income (NOI) contribution expected from the CoreWeave agreement, which, at full scale, could reach $500 million annually.
Looking ahead, Applied Digital has plans to bring the Polaris Forge 2 campus online. This facility, also located in North Dakota, will provide an additional 300 megawatts of data center capacity. The initial phase is slated to begin operations in late 2026, with the campus expected to be fully operational by 2027. Notably, the risk associated with unleased or unsold capacity has been mitigated by another significant lease: a 15-year, $5 billion agreement with a U.S.-based hyperscale cloud provider for 200 megawatts of this facility.
As both Polaris Forge campuses progress toward full operational status, Applied Digital is on track to achieve a long-term annual NOI target of approximately $1 billion within the next five years. The company's focus on providing AI-optimized data center infrastructure aligns with current market dynamics, where ready capacity has become a key constraint in AI infrastructure deployment rather than the availability of GPUs.
Given the strong contractual footing, anticipated capacity expansion, and the structural demand supporting AI workloads, Applied Digital appears well positioned to benefit from sustained hyperscale cloud demand. These factors translate into meaningful cash flow visibility with potential upside for investors willing to establish a position prior to further price appreciation.