Applied Digital (NASDAQ:APLD) Shares Climb 9.4% – What’s Next?

Applied Digital Corporation (NASDAQ:APLD)’s stock price rose 9.4% during trading on Tuesday. The company traded as high as $19.77 and last traded at $19.51. 20,202,559 shares changed hands during mid-day trading, a decline of 13% from the average session volume of 23,119,492 shares. The stock had previously closed at $17.83.

Applied Digital News Roundup

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

• Positive Sentiment: AI data-center operators rebounded broadly after industry executives pushed back against concerns that demand for AI computing capacity is weakening or that financing problems will leave facilities unfinished. Applied Digital was among the strongest performers in the group. Why Is Applied Digital Stock Surging on Tuesday?
• Positive Sentiment: Investors continue to focus on Applied Digital’s substantial revenue growth and recent quarterly results, which exceeded analyst expectations. One analyst cited in the coverage maintains a highly bullish outlook, implying nearly 400% potential upside based on expected long-term AI infrastructure demand. Applied Digital Keeps Cratering: This Analyst Keeps Insisting It’s Going to Jump by 390%
• Positive Sentiment: Unusually high call-option activity and reported purchases by Applied Digital co-founders may be supporting sentiment by signaling speculative or insider confidence after the stock reached a one-year low. Applied Digital Co-Founders Snap Up Shares
• Neutral Sentiment: The rebound appears to be driven more by sector sentiment than by a new company-specific announcement. Applied Digital remains highly volatile, unprofitable, and leveraged, making execution and access to capital important risks.
• Negative Sentiment: Elon Musk’s warning that debt financing for AI data centers is drying up triggered a selloff in neocloud stocks, including Applied Digital, and raised concerns about overbuilding, funding availability, and future tenant demand. Elon Musk’s Warning Sends Neocloud Stocks Tumbling

Analyst Upgrades and Downgrades

Several equities analysts have issued reports on the company. Weiss Ratings reiterated a “sell (d-)” rating on shares of Applied Digital in a research report on Monday, October 19th. Zacks Research cut Applied Digital from a “hold” rating to a “strong sell” rating in a report on Wednesday, August 26th. Roth Capital set a $35.00 price target on Applied Digital and gave the company a “buy” rating in a research note on Wednesday, October 21st. Citigroup reaffirmed a “market outperform” rating on shares of Applied Digital in a report on Thursday, October 8th. Finally, Morgan Stanley set a $41.00 price objective on Applied Digital and gave the stock an “equal weight” rating in a research report on Friday, October 9th. Three research analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, two have assigned a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $59.75.

Applied Digital Stock Up 9.4%

The company has a debt-to-equity ratio of 3.90, a current ratio of 2.56 and a quick ratio of 2.56. The company has a market capitalization of $5.90 billion, a price-to-earnings ratio of -11.90 and a beta of 5.99. The firm’s 50-day simple moving average is $25.11 and its two-hundred day simple moving average is $31.71.

Applied Digital (NASDAQ:APLD) last posted its quarterly earnings results on Wednesday, October 7th. The company reported ($0.01) earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($0.30) by $0.29. The company had revenue of $300.39 million during the quarter, compared to the consensus estimate of $116.29 million. Applied Digital had a negative net margin of 51.28% and a negative return on equity of 27.21%. The company’s revenue for the quarter was up 367.8% on a year-over-year basis. During the same period last year, the firm earned ($0.03) EPS. Sell-side analysts predict that Applied Digital Corporation will post -2.17 EPS for the current fiscal year.

Insider Buying and Selling

In other news, President Jason Gechen Zhang bought 300,000 shares of the stock in a transaction on Friday, October 16th. The shares were bought at an average price of $18.86 per share, with a total value of $5,658,000.00. Following the completion of the acquisition, the president owned 2,839,227 shares of the company’s stock, valued at approximately $53,547,821.22. This trade represents a 11.81% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Wes Cummins purchased 55,803 shares of the business’s stock in a transaction dated Friday, October 16th. The shares were purchased at an average cost of $18.04 per share, with a total value of $1,006,686.12. Following the purchase, the chief executive officer directly owned 5,874,453 shares in the company, valued at approximately $105,975,132.12. The trade was a 0.96% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. 9.50% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Applied Digital

Several hedge funds have recently added to or reduced their stakes in APLD. Flagship Harbor Advisors LLC raised its position in Applied Digital by 26.9% during the third quarter. Flagship Harbor Advisors LLC now owns 17,608 shares of the company’s stock worth $429,000 after acquiring an additional 3,728 shares during the last quarter. McGuire Investment Group LLC increased its stake in shares of Applied Digital by 1.9% during the 3rd quarter. McGuire Investment Group LLC now owns 158,724 shares of the company’s stock worth $3,868,000 after purchasing an additional 2,950 shares in the last quarter. Inspire Investing LLC purchased a new position in shares of Applied Digital during the 3rd quarter worth approximately $794,000. Royal Fund Management LLC raised its position in shares of Applied Digital by 184.3% during the 3rd quarter. Royal Fund Management LLC now owns 97,950 shares of the company’s stock worth $2,387,000 after purchasing an additional 63,500 shares during the last quarter. Finally, Root Financial Partners LLC acquired a new position in shares of Applied Digital during the 3rd quarter worth approximately $52,000. 65.67% of the stock is currently owned by hedge funds and other institutional investors.

Applied Digital Company Profile

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

Its business includes high-performance computing data centers and cloud services intended to support artificial intelligence, machine learning, cryptocurrency mining and other compute-intensive workloads.