UBS initiates Applied Digital at Buy with $38 price target, citing AI infrastructure momentum

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UBS initiates Applied Digital at Buy with $38 price target, citing AI infrastructure momentum

The investment bank’s coverage launch arrives as Applied Digital rides a wave of hyperscaler contracts and triple-digit revenue growth.

by
Editorial Team

Sep. 23, 2026

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UBS analyst John Hodulik has initiated coverage of Applied Digital Corporation (NASDAQ: APLD) with a Buy rating and a $38 price target, adding another bullish voice to a growing chorus of Wall Street support for the AI infrastructure play.

The initiation places UBS on the conservative end of the analyst spectrum. The broader consensus among roughly 15 to 20 covering firms skews toward Moderate Buy or Strong Buy, with average price targets venturing above $60, well north of Hodulik’s figure.

Revenue growth that demands a double take

Applied Digital’s recent financial results explain why analysts keep lining up. The company posted fourth-quarter fiscal year 2026 revenue of $258.7 million, a 407% increase compared to the same period a year earlier.

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For the full fiscal year 2026, revenue hit $611.3 million. That represents a 167% jump from the prior year.

Applied Digital builds and operates data center campuses optimized for high-performance computing and AI workloads. Its business model revolves around long-term colocation and hosting leases, including 15-year take-or-pay agreements with major technology providers, meaning clients commit to paying whether or not they fully utilize the capacity.

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The total contracted long-term lease value across Applied Digital’s five campuses sits at approximately $36 billion.

The power-advantaged playbook

Applied Digital’s competitive moat centers on what it calls a power-advantaged site strategy. The company’s North American campuses, including facilities branded as Polaris Forge and Delta Forge, are specifically designed for the thermal and electrical demands of dense AI and HPC workloads.

Where UBS fits in the analyst landscape

With 11 or more Buy ratings already on the stock, UBS is joining a party that’s been building for several quarters. The gap between UBS’s $38 target and consensus targets above $60 is notable, suggesting Hodulik may be applying a more cautious lens to execution risk, capital needs, or valuation multiples.

For investors weighing the stock, the spread between UBS’s $38 target and the consensus above $60 creates an interesting dynamic. If the company continues delivering quarters like the 407% revenue growth it just posted, the lower target may prove to be a conservative entry point.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.