UBS Has Initiated Coverage of Applied Digital

The firm assigned a buy rating and set a price target of $38 for the data center operator.

Updated on Sept. 23, 2026 in Data Centers

Isometric editorial illustration of a modular industrial cooling unit, representing high-performance computing data infrastructure. — UBS initiated coverage of data center operator Applied Digital on Tuesday, assigning the company a buy rating and setting a $38 price target. AI Illustration. Upload story photo >

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UBS initiated analyst coverage of Applied Digital Corporation, assigning the firm a buy rating. The investment bank set a price target of $38 for the company as it continues to expand its operations in high-performance computing.

Why it matters

The move follows significant growth for Applied Digital, which has seen its revenue surge as it secures large-scale infrastructure contracts. The company relies on long-term, take-or-pay lease agreements to anchor its data center campus projects.

Applied Digital reported fiscal year 2026 revenue of $611.3 million, a 167% annual increase, with fourth-quarter revenue of $258.7 million reflecting 407% growth. The company manages long-term infrastructure contracts valued at approximately $36 billion.

The players

UBS

This is a global financial services firm that provides investment banking and wealth management services.

Applied Digital Corporation

This company develops and operates next-generation data center infrastructure for high-performance computing.

The details

Applied Digital builds and operates data center campuses across North America designed for high-performance computing needs. By securing long-term take-or-pay lease contracts with technology providers, the company establishes a stable revenue model despite rapid growth.

Fiscal Year 2026 saw Applied Digital generate $611.3 million in revenue.
Q4 Fiscal Year 2026 revenue reached $258.7 million.
UBS initiated coverage of Applied Digital on September 23, 2026.

The Tech Race

The firm's initiation reflects the intense capital deployment currently occurring as providers scramble to meet the infrastructure demands of high-performance computing. This shift is replacing legacy localized data solutions with massive, long-term leased campuses tailored for the AI era.

While the analyst coverage primarily affects investors, the company's expansion directly influences the availability of high-performance computing resources for tech developers. Users may see increased capacity for advanced cloud services as more of these large-scale campuses become operational.

The takeaway

The move by UBS underscores the significant financial stakes involved in the massive build-out of modern data center infrastructure. Investors should monitor how the company balances its aggressive revenue growth against the long-term obligations of its $36 billion contract backlog.