Needham & Co. analyst John Todaro raised the price target for Applied Digital Corp APLD to $16.00 from $8.50, maintaining a Buy rating.

Given the company's stable BTC mining segment, the analyst sees APLD's downside as limited and expects the segment to remain strong till mid-2024. 

The analyst raised the FY24 revenue estimate to $309.4 million (from $304.1 million) on a strong demand pipeline, as evidenced by new AI contracts. 

Related: Applied Digital Inks Pact With Hewlett Packard Enterprise To Deliver AI Cloud Services

Also, Todaro expects a ramp-up of the AI &co-lo HPC segment, with the contribution in FY25. 

The analyst estimates revenues and adjusted EBITDA of $561 million and $252 million, respectively, in FY25.

Price Action: APLD shares are trading higher by 5.10% at $8.09 on last check Friday.