Applied Digital (NASDAQ:APLD) Stock Falls 2.7% – Time to Sell?

Applied Digital Corporation (NASDAQ:APLD) shares were down 2.7% during trading on Monday. The stock traded as low as $24.22 and last traded at $24.70. 23,599,049 shares changed hands during trading, an increase of 5% from the average session volume of 22,574,125 shares. The stock had previously closed at $25.38.

Key Stories Impacting Applied Digital

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

• Positive Sentiment: Applied Digital secured access to up to 1 gigawatt of potential power capacity in Finland for a large-scale AI Factory campus. The project represents the company’s first development opportunity outside the United States and gives it a foothold in Europe’s growing AI infrastructure market. Finland’s power availability, cooler climate and connectivity could support hyperscale computing demand. Applied Digital Secures Up to 1 GW of Potential Power Capacity in Finland
• Positive Sentiment: The Finland agreement is supporting renewed interest in Applied Digital’s AI data-center expansion strategy. Management said it remains focused on its U.S. development pipeline while discussions with potential hyperscale customers are underway for the Finnish site. Applied Digital climbs on securing 1GW power site for European AI campus
• Neutral Sentiment: Applied Digital is scheduled to report fiscal first-quarter results after the close on October 7. Investors will be watching revenue growth, customer commitments, project execution and financing needs to determine whether the company can regain momentum after its stock fell substantially from its 52-week high. Applied Digital Q1 Preview
• Negative Sentiment: Risks remain elevated because Applied Digital carries significant debt, continues heavy AI infrastructure spending and has a history of earnings losses. Approximately 21% of its public float was sold short ahead of the report, increasing the potential for sharp moves if results or guidance disappoint. Applied Digital Reports With 21% of Its Float Sold Short

Analyst Upgrades and Downgrades

Several research firms have issued reports on APLD. Morgan Stanley upped their price objective on Applied Digital from $36.50 to $37.50 and gave the stock an “equal weight” rating in a report on Thursday, August 6th. Lake Street Capital lifted their target price on Applied Digital from $70.00 to $90.00 and gave the company a “buy” rating in a research note on Tuesday, June 9th. Wells Fargo & Company started coverage on Applied Digital in a research report on Thursday, September 17th. They set an “overweight” rating and a $50.00 target price for the company. Weiss Ratings restated a “sell (d-)” rating on shares of Applied Digital in a research report on Tuesday, July 21st. Finally, B. Riley Financial reaffirmed a “buy” rating and set a $75.00 price target (up from $66.00) on shares of Applied Digital in a research note on Monday, August 3rd. Three equities research 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 issued a Sell rating to the company’s stock. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average price target of $60.88.

Applied Digital Price Performance

The firm has a market capitalization of $7.39 billion, a price-to-earnings ratio of -28.47 and a beta of 5.99. The company has a quick ratio of 4.01, a current ratio of 4.01 and a debt-to-equity ratio of 2.88. The company’s fifty day moving average is $27.14 and its two-hundred day moving average is $32.56.

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

Insider Activity at Applied Digital

In related news, Director Richard Nottenburg sold 75,000 shares of Applied Digital 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 completion of the sale, the director directly owned 133,378 shares of the company’s stock, valued at $4,154,724.70. The trade was a 35.99% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 9.50% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of the company. Whitaker Myers Wealth Managers LTD. acquired a new stake in Applied Digital in the 2nd quarter valued at approximately $1,841,000. Cambridge Investment Research Advisors Inc. boosted its position in Applied Digital by 39.6% during the 2nd quarter. Cambridge Investment Research Advisors Inc. now owns 146,633 shares of the company’s stock worth $5,469,000 after acquiring an additional 41,562 shares during the last quarter. Dimensional Fund Advisors LP acquired a new position in Applied Digital during the 1st quarter worth approximately $1,970,000. Situational Awareness LP grew its stake in shares of Applied Digital by 14.1% during the 2nd quarter. Situational Awareness LP now owns 15,384,616 shares of the company’s stock worth $574,000 after acquiring an additional 1,906,178 shares in the last quarter. Finally, TFR Capital LLC. grew its stake in shares of Applied Digital by 425.3% during the 1st quarter. TFR Capital LLC. now owns 372,960 shares of the company’s stock worth $9,497,000 after acquiring an additional 301,954 shares in the last quarter. Institutional investors own 65.67% of the company’s stock.

About Applied Digital

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.