Morgan Stanley initiated coverage of Applied Digital (APLD) with an Equal Weight rating.
The firm established a price target of $36.50 for the stock.
This analysis is part of a sector review of bitcoin miners transitioning into high-performance computing (HPC) providers, or powered shell providers.
Analysts expect Applied Digital to generate below-average returns on capital expenditures compared to peer data center providers.
Morgan Stanley remains bullish on the broader sector due to lucrative deals with hyperscalers.
The neutral rating reflects specific caution regarding Applied Digital’s investment yields.