Applied Digital (NASDAQ:APLD) Trading Down 12.8% – What’s Next?

Applied Digital Corporation (NASDAQ:APLD)’s share price fell 12.8% during mid-day trading on Wednesday . The company traded as low as $22.93 and last traded at $23.22. Approximately 31,083,272 shares traded hands during mid-day trading, an increase of 27% from the average session volume of 24,564,672 shares. The stock had previously closed at $26.62.

Trending Headlines about Applied Digital

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

• Positive Sentiment: Fiscal fourth-quarter revenue surged approximately 407% year over year to $258.7 million, exceeding Wall Street expectations, while adjusted earnings of $0.04 per share compared favorably with estimates for a loss. Management attributed the growth to strong demand for AI and high-performance-computing data centers. Applied Digital revenue quadruples on AI data center demand
• Positive Sentiment: Applied Digital said contracted lease value reached $36 billion, up 125% year over year, with approximately 1.4 gigawatts of contracted AI capacity across five campuses. The company is targeting a $1 billion annual net operating income run rate within a year, supported by long-term hyperscaler commitments, including contracts involving CoreWeave. Applied Digital expects $1B NOI run rate
• Positive Sentiment: Needham reaffirmed its “buy” rating and $83 price target, while Applied Digital highlighted financing and expansion plans for additional AI campuses. Needham reiterates buy rating
• Neutral Sentiment: Zacks Research upgraded APLD from “strong sell” to “hold,” indicating improving sentiment but not a bullish endorsement. Zacks Research
• Negative Sentiment: GAAP results remained weak: the company reported a $0.39-per-share loss versus a roughly $0.09 expected loss, alongside a negative net margin and negative return on equity. Investors may be concerned that rapid expansion requires substantial debt and capital spending.
• Negative Sentiment: APLD has fallen about 30% over the past month alongside former Bitcoin miners IREN and TeraWulf, reflecting concerns that elevated valuations, power constraints, financing needs and execution risks could undermine the AI data-center investment thesis. Data-center stock selloff analysis

Analyst Upgrades and Downgrades

Several equities analysts have recently commented on APLD shares. Needham & Company LLC reaffirmed a “buy” rating and set a $83.00 price objective on shares of Applied Digital in a research note on Tuesday. Citizens Jmp boosted their target price on shares of Applied Digital from $40.00 to $60.00 and gave the company a “market outperform” rating in a report on Thursday, May 21st. Compass Point reaffirmed a “buy” rating and set a $70.00 price objective on shares of Applied Digital in a research report on Friday, May 22nd. B. Riley Financial reaffirmed a “buy” rating and issued a $66.00 target price (up from $53.00) on shares of Applied Digital in a report on Wednesday, May 27th. Finally, Lake Street Capital upped their price target on Applied Digital from $70.00 to $90.00 and gave the company a “buy” rating in a report on Tuesday, June 9th. Three investment analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, Applied Digital currently has an average rating of “Buy” and a consensus target price of $67.15.

Applied Digital Stock Performance

The company has a debt-to-equity ratio of 1.65, a quick ratio of 2.38 and a current ratio of 2.38. The business’s 50-day moving average price is $38.34 and its 200-day moving average price is $34.52. The stock has a market cap of $6.64 billion, a P/E ratio of -26.09 and a beta of 5.67.

Applied Digital (NASDAQ:APLD) last posted its quarterly earnings data on Monday, July 27th. The company reported ($0.39) EPS for the quarter, missing the consensus estimate of ($0.09) by ($0.30). The company had revenue of $240.35 million during the quarter, compared to the consensus estimate of $96.85 million. Applied Digital had a negative return on equity of 17.53% and a negative net margin of 37.78%.The firm’s quarterly revenue was up 406.3% compared to the same quarter last year. During the same period last year, the business earned ($0.24) EPS. As a group, sell-side analysts expect that Applied Digital Corporation will post -1.1 earnings per share for the current fiscal year.

Insider Activity at Applied Digital

In related news, Director Richard N. Nottenburg sold 12,500 shares of the stock in a transaction dated Thursday, April 30th. The stock was sold at an average price of $34.59, for a total transaction of $432,375.00. Following the completion of the sale, the director owned 208,378 shares in the company, valued at approximately $7,207,795.02. This trade represents a 5.66% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. 9.50% of the stock is owned by insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Albion Financial Group UT bought a new stake in shares of Applied Digital during the fourth quarter valued at approximately $25,000. Activest Wealth Management purchased a new position in shares of Applied Digital in the fourth quarter worth $25,000. Ameriflex Group Inc. bought a new position in shares of Applied Digital during the fourth quarter worth $25,000. McMillan Office Inc. bought a new stake in Applied Digital in the 4th quarter valued at $25,000. Finally, Larson Financial Group LLC lifted its stake in Applied Digital by 56,450.0% in the 3rd quarter. Larson Financial Group LLC now owns 1,131 shares of the company’s stock worth $26,000 after purchasing an additional 1,129 shares in the last quarter. 65.67% of the stock is currently owned by institutional investors.

About Applied Digital

Applied Digital (NASDAQ: APLD) is a technology company specializing in the development and operation of large-scale digital infrastructure and sustainable Bitcoin mining solutions. Through its integrated platform, the company designs, builds and manages turnkey data center facilities while also providing comprehensive hosting services for cloud, colocation and enterprise computing needs. Applied Digital’s modular approach to facility design enables rapid deployment of capacity and streamlined integration of power, cooling and network connectivity.

In addition to its data center business, Applied Digital operates a network of Bitcoin mining sites that leverage vertically integrated capabilities, including hardware procurement, mining farm engineering, energy management and real-time performance monitoring.