Applied Digital (NASDAQ:APLD) Shares Climb 6.6% on Insider Buying Activity

Applied Digital Corporation (NASDAQ:APLD) shares shot up 6.6% during mid-day trading on Monday following insider buying activity. The company traded as high as $20.14 and last traded at $19.25. Approximately 36,030,235 shares changed hands during trading, an increase of 56% from the average daily volume of 23,103,189 shares. The stock had previously closed at $18.05.

Specifically, President Jason Gechen Zhang bought 300,000 shares of Applied Digital stock in a transaction dated Friday, October 16th. The stock was bought at an average cost of $18.86 per share, for a total transaction of $5,658,000.00. Following the purchase, the president directly owned 2,839,227 shares in the company, valued at approximately $53,547,821.22. This represents a 11.81% increase in their position. The purchase was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Wes Cummins bought 55,803 shares of the firm’s stock in a transaction that occurred on Friday, October 16th. The stock was purchased at an average cost of $18.04 per share, with a total value of $1,006,686.12. Following the completion of the transaction, the chief executive officer directly owned 5,874,453 shares in the company, valued at $105,975,132.12. This represents a 0.96% increase in their ownership of the stock. The SEC filing for this purchase provides additional information.

Wall Street Analyst Weigh In

A number of research analysts recently weighed in on the company. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Applied Digital in a research note on Tuesday, July 21st. B. Riley Financial reissued a “buy” rating and issued a $75.00 price objective (up from $66.00) on shares of Applied Digital in a research note on Monday, August 3rd. Rothschild & Co Redburn set a $22.00 price objective on Applied Digital and gave the company a “neutral” rating in a research note on Monday, September 21st. Morgan Stanley set a $41.00 price objective on Applied Digital and gave the company an “equal weight” rating in a report on Friday, October 9th. Finally, Wall Street Zen lowered Applied Digital from a “sell” rating to a “strong sell” rating in a research report on Sunday, August 30th. Three 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 given a Sell rating to the company’s stock. Based on data from MarketBeat, Applied Digital has an average rating of “Moderate Buy” and a consensus target price of $62.25.

Applied Digital News Summary

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

• Positive Sentiment: Applied Digital President Jason Gechen Zhang purchased 300,000 shares for approximately $5.66 million, increasing his ownership by 11.81%. CEO Wes Cummins also bought 55,803 shares for about $1.01 million. The purchases may signal that senior executives view the recent weakness as an attractive entry point. Applied Digital insider purchases
• Positive Sentiment: AI-infrastructure stocks are rebounding broadly, with investors refocusing on companies that control power-backed data-center capacity. Applied Digital is benefiting from renewed enthusiasm for AI data-center demand after the sector’s recent selloff. AI infrastructure stocks rally
• Positive Sentiment: A look back at Applied Digital’s prior 52-week high highlights how strongly investors have responded to its AI data-center strategy, reinforcing the long-term growth narrative despite recent volatility. Applied Digital 52-week high and AI data centers
• Neutral Sentiment: Investor Kevin O’Leary argues that as many as 65% of announced AI data-center projects may fail because they lack power, permits or tenants. This could benefit Applied Digital if its sites are fully permitted and powered, but also underscores the need to secure customers before committing further capital. Power, permits and tenants for AI data centers
• Negative Sentiment: Applied Digital’s AI-related revenue is reportedly up 322%, but interest expense surged 866 amid approximately $6.4 billion of debt. The resulting financing burden threatens profitability and could limit the benefit of rapid revenue growth. Applied Digital interest costs and profitability
• Negative Sentiment: A director’s reported $682,500 stock sale and earlier coverage of insider selling added pressure during the recent selloff, although the subsequent CEO and president purchases provide a counterpoint. Applied Digital insider trading coverage

Applied Digital Price Performance

The stock has a market capitalization of $5.82 billion, a price-to-earnings ratio of -11.74 and a beta of 5.99. The business’s fifty day moving average price is $26.11 and its 200-day moving average price is $32.36. The company has a debt-to-equity ratio of 3.90, a current ratio of 2.56 and a quick ratio of 2.56.

Applied Digital (NASDAQ:APLD) last posted its earnings results on Wednesday, October 7th. The company reported ($0.01) earnings per share for the quarter, topping analysts’ consensus estimates of ($0.30) by $0.29. Applied Digital had a negative net margin of 51.28% and a negative return on equity of 27.21%. The company had revenue of $300.39 million for the quarter, compared to analyst estimates of $116.29 million. During the same quarter in the prior year, the business posted ($0.03) EPS. The firm’s revenue was up 367.8% compared to the same quarter last year. On average, research analysts forecast that Applied Digital Corporation will post -2.06 EPS for the current year.

Hedge Funds Weigh In On Applied Digital

Hedge funds have recently added to or reduced their stakes in the stock. Whitaker Myers Wealth Managers LTD. bought a new position in shares of Applied Digital in the second quarter valued at approximately $1,841,000. Cambridge Investment Research Advisors Inc. boosted its position in shares of Applied Digital by 39.6% during the second quarter. Cambridge Investment Research Advisors Inc. now owns 146,633 shares of the company’s stock valued at $5,469,000 after buying an additional 41,562 shares during the last quarter. Dimensional Fund Advisors LP purchased a new position in shares of Applied Digital during the first quarter valued at approximately $1,970,000. Situational Awareness LP boosted its position in shares of Applied Digital by 14.1% during the second quarter. Situational Awareness LP now owns 15,384,616 shares of the company’s stock valued at $574,000 after buying an additional 1,906,178 shares during the last quarter. Finally, TFR Capital LLC. grew its holdings in Applied Digital by 425.3% during the first quarter. TFR Capital LLC. now owns 372,960 shares of the company’s stock worth $9,497,000 after buying an additional 301,954 shares in the last quarter. Institutional investors and hedge funds 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 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.