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Needham Reaffirms Bullish View on Applied Digital (APLD) Following Landmark Ellendale Lease

On Monday, June 2, Needham’s John Todaro reaffirmed his Buy rating on Applied Digital Corporation (NASDAQ:APLD), keeping the price target unchanged at $10. He highlighted the company’s new 15-year, 250-megawatt (MW) lease agreement with CoreWeave Inc. (NASDAQ:CRWV) at its Ellendale site as a significant development with the potential to strengthen Applied Digital’s revenue profile and strategic industry position.

Over the term of the agreement, Applied Digital expects to generate approximately $7 billion in total revenue. The deal also gives CoreWeave the option to access an additional 150 MW of capacity at the same site, further reinforcing Ellendale’s potential as a scalable hub for expanding high-performance computing (HPC) workloads. Wes Cummins, Chairman and CEO of Applied Digital, aptly described Ellendale as a launchpad for the future of AI infrastructure, rather than just a development project.

A panoramic aerial view of a modern data center with high-performance computing.

According to the analyst, this agreement stands out for both its scale and strategic value. It not only brings in a sizable revenue stream, starting at $360 million and projected to grow over time, but also helps establish the Ellendale facility as a viable option for large-scale infrastructure clients. The association with CoreWeave, a company that works with major hyperscalers such as OpenAI, Microsoft, and Google, may help Applied Digital attract additional interest from enterprise customers.

Todaro also noted the solid potential benefits of the lease, with net operating income margins expected in the 88%-90% range, supporting a high-yield profile for the asset. While Applied Digital has previously faced setbacks, particularly around the execution of agreements with Macquarie, Todaro does not rule out the possibility of Macquarie re-engaging with the company under revised terms.

In addition, Applied Digital plans to seek project financing soon, with a targeted loan-to-value ratio of 70%. This could provide the necessary capital to advance development while maintaining balance sheet flexibility.

Investors responded to the deal with enthusiasm, as the stock surged 48% on Monday, with an additional 8% gain in pre-market trading at the time of writing.

Applied Digital Corp. is engaged in designing, developing, and operating cutting-edge digital infrastructure throughout North America. Originally a crypto miner, the company terminated mining operations in early 2022 and transitioned to offering digital infrastructure solutions and cloud services to the fast-growing sectors of High-Performance Computing (HPC) and AI.

While we acknowledge the potential of APLD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than APLD and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
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AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

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AI needs energy. Energy needs infrastructure.

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This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

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This company is completely debt-free.

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The Hedge Fund Secret That’s Starting to Leak Out

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Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
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  • A surge in U.S. LNG exports
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Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

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A New Dawn is Coming to U.S. Stocks

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