Why Applied Digital Stock Is Skyrocketing Today
Key Points
Applied Digital beat analysts' estimates on the top and bottom lines.
Several analysts hiked their price targets on Applied Digital stock.
Despite trading at a high sales multiple, Applied Digital stock still seems attractive.
- 10 stocks we like better than Applied Digital ›
Applied Digital (NASDAQ: APLD) stock is racing higher heading into the weekend on the heels of the data center developer reporting first quarter 2026 financial results yesterday after the market closed.
As of 9:46 a.m. ET, shares of Applied Digital are up 29.4%.
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Applied Digital is off to a flying start in fiscal 2026 -- and it may soar even higher
Beating analysts' estimates that it would post revenue of $45.5 million on the top line, Applied Digital reported first quarter 2026 sales of $64.2 billion due to the rapid growth of artificial intelligence computing. The company also surpassed expectations on the bottom line. While analysts expected the company to report adjusted earnings per share of negative $0.16, Applied Digital reported an adjusted loss per share of $0.03.
Management believes the company's strong performance in Q1 2026 is just the beginning. Lauding the company's leading industry position, CEO Wes Cummins said, "With hyperscalers expected to invest approximately $350 billion into AI deployment this year, we believe we are in a prime position to serve as the modern-day picks and shovels of the intelligence era."
The company's strong financial results motivated several analysts to boost their price targets today:
- Northland raised its price target to $40 from $30.
- Lake Street hiked its price target to $37 from $18.
- Craig-Hallum lifted its price target to $37 from $23.
Is it too late to buy Applied Digital stock?
While Applied Digital stock is racing higher, investors shouldn't feel that they've missed the boat as there's certainly potential for the stock to run higher. The data center infrastructure stock is priced at 37 times sales, which is admittedly pricey but still reasonable for a growth stock.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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