Applied Digital Corp. shares closed 8% higher at $26.38 on Thursday after Wells Fargo initiated coverage, named the data center operator a top pick and set a $50 price target, implying roughly 90% upside. The bank cited Applied Digital’s utility-power allocations, multi-gigawatt site interconnects and power-advantaged locations, which it said carry relatively lower regulatory risk for high-density AI workloads. Wells Fargo also highlighted $36 billion in long-term, take-or-pay lease agreements with top-tier hyperscale cloud providers, potentially rising to $86 billion over 30 years if renewal options are exercised. The bank estimated the contracted book alone is worth about $30 per share on a net present value basis. Applied Digital’s shares had fallen roughly 50% from their $50.73 52-week high reached in May, pressured by debt growth, construction execution, macroeconomic uncertainty, memory-chip shortages and higher energy costs. Debt reached about $5 billion as of May 31, compared with less than $700 million a year earlier, while fiscal fourth-quarter revenue rose more than 400% year over year to $258.7 million. The company also supplies AI computing power to hyperscalers including Microsoft through ChronoScale, which it spun off in May while retaining approximately 97% ownership. Investors will focus on whether Applied Digital can convert its contracted backlog into realized revenue as new facilities are completed; analysts project fiscal 2028 revenue of approximately $1.45 billion.