10 Best Information Technology Services Stocks to Buy Right Now

7. Applied Digital Corporation (NASDAQ:APLD)

Analyst Upside: 31.72%

No. of Hedge Fund Holders: 26

Applied Digital Corporation (NASDAQ:APLD) offers digital infrastructure, cloud services, and high-performance computing solutions for AI, machine learning, and crypto mining across North America. Originally a crypto miner, the company quit its mining operations in March 2022 and transitioned to providing digital infrastructure solutions and cloud services to the fast-growing sectors of High-Performance Computing (HPC) and AI.

Applied Digital Corporation (NASDAQ:APLD) has demonstrated strong performance across its Data Center Hosting (DCH) business, which generated over 85% of the company’s revenue in FY2024. APLD’s Cloud Services (CS) business, which offers high-performance computing power for AI and ML applications, accounted for 17% of total revenue. The company has diversified its revenue base, with its CS revenue growing over 523% year-on-year as of Q2 FY 2025.

On February 4, Northland Securities analyst Michael Grondahl increased the price target on APLD shares from $12 to $20, maintaining a Buy rating on the stock. The company has secured $375 million in financing through its HPC subsidiary, APLD HPC Holdings LLC, with SMBC. This will allow the company to pay off its Macquarie Capital senior secured note while investing the remaining capital to develop two data center buildings at the Ellendale HPC Campus. CFO Saidal Mohmand noted that Applied Digital Corporation plans to replace the SMBC loan with permanent project financing once a hyperscale lease is secured.