Wells Fargo Initiates Coverage on Applied Digital with Overweight Rating
On September 17, Wells Fargo initiated coverage of Applied Digital Corporation (NASDAQ: APLD) with an 'Overweight' rating and a $50 price target. Analyst Eric Luebchow highlighted the company as a Top Idea based on its signed data center leases to AI companies, which total approximately 1.4 gigawatts in contracted capacity valued at around $36 billion over their base term. The bank estimates that lease renewals could push this value beyond $86 billion across three decades, with more than 70% of the megawatts tied directly to Meta and Oracle. Wells Fargo values these signed leases at about $30 per share on a net present value basis—above APLD’s closing price of $24.39 before coverage began. However, concerns remain regarding capital requirements for construction, tenant concentration risk (with CoreWeave being the weakest link), and the gap between contracted capacity and actual revenue generation.
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Topics: AI Data Centers Applied Digital Lease Valuation Wells Fargo