Applied Blockchain Inc (APLD) PT Raised to $11 at Lake Street Capital Markets

Lake Street Capital Markets analyst Rob Brown raised the price target on Applied Blockchain Inc (NASDAQ: APLD) to $11.00 (from $7.00) while maintaining a Buy rating.

The analyst commented: "Q1 results were better than expected and showed a quarter with both the Bitcoin hosting and AI Cloud businesses running near full capacity. EBITDA was at an annualized $80 million rate. This is in line with estimates, but it is the first quarter where results have shown this, and we believe it will go a long way toward rebuilding management credibility after a tough start to CY24. The AI Cloud business performed well in the quarter and six clusters are now operating. Management expects to add clusters to fill unused data center capacity, and we believe this can start to contribute into CY25. The large pending hyperscaler contract appears to be near signing, and management believes it is 98%-99% of the way to contract completion. The contract will be for the first 100 MW data center with options on the next two 150 MW facilities. We are optimistic this lease contract can move forward quickly, and management noted long-term project financing is in place pending the completion of the lease contract. We believe this would be a catalyst for shares. Given this progress, we are increasing our price target to $11 to reflect the value of the company with a full 400 MW of AI data centers, net of an increased share count. Our $11 price target is based on $2/share for the base business and $9/share for the 400MW of planned AI data center capacity."

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