Key Points

An analyst initiated coverage on the company. He feels its share price could rise by 60%-plus. 10 stocks we like better than Applied Digital ›

Applied Digital(NASDAQ: APLD) was a double-digit winner on Thursday, as its stock price popped by over 10%.

That was due in no small part to the initiation of coverage of the cutting-edge data center builder's stock by an analyst, who, it turns out, is extremely bullish on its prospects. Applied's share price trajectory was all the more impressive, considering that the S&P 500 index basically closed flat across the trading session.

An enthusiastic buy recommendation from a pundit

The initiating party was Citizens JMP's Greg Miller, who launched his tracking of Applied stock by tagging it with a market outperform (read: buy) recommendation at a price target of $12 per share.Image source: Getty Images.

That would be significant upside even after Thursday's rally in the shares, as that's a meaty 60%-plus above the stock's most recent closing level.

According to reports, Miller believes that Applied's pivot from its onetime specialty of Bitcoin mining infrastructure to its current focus on data centers is a clever move. He feels it should start to reap the benefits of this soon and anticipates the signing of a hyperscaler client in the very near future (while noting that this anticipated event has been delayed several times).

Nothing artificial about this potential

I'd agree that Applied's transformation from Bitcoin mining supply to data center infrastructure is a smart shift. I feel that, given the near-insatiable hunger for facilities that can support the relatively much higher resource demands of artificial intelligence (AI) functionalities, this market holds significantly more promise.

Should you invest $1,000 in Applied Digital right now?

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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Why AI Stock Applied Digital Stock Surged More Than 10% Higher Today was originally published by The Motley Fool

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