Applied Digital (NASDAQ:APLD) Stock Falls 4.1% – Here’s What Happened

Applied Digital Corporation (NASDAQ:APLD)’s stock price traded down 4.1% on Wednesday. The company traded as low as $24.36 and last traded at $24.37. 15,305,684 shares were traded during mid-day trading, a decline of 32% from the average session volume of 22,575,086 shares. The stock had previously closed at $25.41.

Key Stories Impacting Applied Digital

Here are the key news stories impacting Applied Digital this week:

• Positive Sentiment: Applied Digital’s approximately $36 billion lease book and transition toward high-performance computing and AI data centers provide substantial long-term growth potential. Several analysts maintain bullish views, with recently cited price targets ranging from $60 to $90. Applied Digital Could Be 64% Undervalued As Analysts Split Ahead Of Earnings
• Positive Sentiment: Institutional activity was mixed but included sizable purchases by Two Sigma, Equitec, D. E. Shaw, Oasis Management and Norges Bank, suggesting some professional investors continue to see upside in the AI-infrastructure strategy.
• Neutral Sentiment: Applied Digital is scheduled to report fiscal first-quarter 2027 results and hold its conference call on October 7. Investors are focused on leasing progress, construction timelines, capital requirements and management’s outlook. Applied Digital Sets Fiscal First Quarter 2027 Conference Call
• Neutral Sentiment: Analyst opinion is sharply divided: some view the company as potentially undervalued based on future contracts, while others argue that current sales and earnings do not yet justify the valuation. Higher interest rates could further raise the cost of funding its capital-intensive expansion. Applied Digital Balancing AI Data Center Ambitions With Funding and Execution Discipline
• Negative Sentiment: Valuation-focused coverage describes APLD as potentially overvalued despite the lease backlog, citing negative earnings, substantial leverage and the lengthy period required to convert contracts into profitable operating results. Applied Digital Stock Looks Overvalued Despite $36B Lease Book
• Negative Sentiment: Approximately 56% of contracted revenue is reportedly tied to one customer, creating concentration risk if that customer delays, renegotiates or cancels commitments. Applied Digital Has 56% of Contracts With One Customer
• Negative Sentiment: Zacks added APLD to its Rank #5 “Strong Sell” list, while recent insider activity showed sales and no purchases. A previously filed resale registration covering up to 53.1 million shares also continues to create potential supply and dilution overhang concerns.

Wall Street Analysts Forecast Growth

Several analysts have commented on the stock. Wall Street Zen lowered shares of Applied Digital from a “sell” rating to a “strong sell” rating in a research report on Sunday, August 30th. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Applied Digital in a report on Tuesday, July 21st. Morgan Stanley upped their price objective on Applied Digital from $36.50 to $37.50 and gave the company an “equal weight” rating in a research note on Thursday, August 6th. B. Riley Financial reissued a “buy” rating and set a $75.00 price objective (up from $66.00) on shares of Applied Digital in a report on Monday, August 3rd. Finally, Needham & Company LLC reissued a “buy” rating and issued a $83.00 target price on shares of Applied Digital in a research report on Tuesday, July 28th. Three analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating, two have assigned a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus target price of $60.88.

Applied Digital Stock Down 4.1%

The company has a market capitalization of $7.10 billion, a PE ratio of -27.38 and a beta of 5.72. The company has a debt-to-equity ratio of 2.88, a quick ratio of 4.01 and a current ratio of 4.01. The stock’s 50 day moving average is $27.47 and its 200 day moving average is $32.65.

Applied Digital (NASDAQ:APLD) last released its quarterly earnings data on Monday, July 27th. The company reported ($0.39) earnings per share for the quarter, missing analysts’ consensus estimates of ($0.09) by ($0.30). Applied Digital had a negative net margin of 37.78% and a negative return on equity of 16.42%. The business had revenue of $240.35 million during the quarter, compared to analysts’ expectations of $96.85 million. During the same quarter in the prior year, the firm posted ($0.24) earnings per share. The firm’s quarterly revenue was up 406.3% on a year-over-year basis. On average, sell-side analysts anticipate that Applied Digital Corporation will post -1.09 EPS for the current fiscal year.

Insider Buying and Selling at Applied Digital

In related news, Director Richard Nottenburg sold 75,000 shares of the business’s stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $31.15, for a total transaction of $2,336,250.00. Following the sale, the director directly owned 133,378 shares in the company, valued at approximately $4,154,724.70. The trade was a 35.99% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Company insiders own 9.50% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in the stock. Situational Awareness LP grew its holdings in Applied Digital by 18.9% during the 1st quarter. Situational Awareness LP now owns 13,478,438 shares of the company’s stock valued at $319,978,000 after buying an additional 2,139,378 shares in the last quarter. Equitec Proprietary Markets LLC purchased a new stake in shares of Applied Digital in the second quarter worth about $312,349,000. Geode Capital Management LLC boosted its position in shares of Applied Digital by 5.1% in the fourth quarter. Geode Capital Management LLC now owns 6,285,820 shares of the company’s stock valued at $154,151,000 after acquiring an additional 304,228 shares during the period. Hsbc Holdings PLC purchased a new position in Applied Digital during the fourth quarter valued at approximately $29,510,000. Finally, Sei Investments Co. grew its stake in Applied Digital by 33.0% during the first quarter. Sei Investments Co. now owns 1,093,701 shares of the company’s stock valued at $25,964,000 after acquiring an additional 271,618 shares in the last quarter. Institutional investors own 65.67% of the company’s stock.

Applied Digital Company Profile

Applied Digital Corporation (NASDAQ: APLD) develops and operates digital infrastructure designed to support high-performance computing, artificial intelligence and other data-intensive applications. The company provides data-center capacity and related services to customers that require substantial computing power and electricity.

The company’s business has included hosting infrastructure for cryptocurrency-mining operations and, increasingly, developing facilities for artificial intelligence and high-performance computing workloads.