Applied Digital (NASDAQ:APLD) Shares Down 4.8% – Here’s Why

Applied Digital Corporation (NASDAQ:APLD) shares fell 4.8% on Thursday. The company traded as low as $19.16 and last traded at $19.41. 15,560,499 shares traded hands during mid-day trading, a decline of 33% from the average daily volume of 23,116,109 shares. The stock had previously closed at $20.39.

Trending Headlines about Applied Digital

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

• Positive Sentiment: Insiders reportedly purchased approximately $7 million of Applied Digital shares during the selloff, signaling that company executives view the decline as an attractive entry point. Applied Digital insiders buy roughly $7M in shares as stock slides
• Positive Sentiment: Applied Digital agreed with Soluna Holdings to develop a jointly owned 50-megawatt critical IT data center in Texas. The project is intended to serve artificial-intelligence and high-performance-computing demand, supporting the company’s growth narrative. Applied Digital shares and Soluna data center agreement
• Positive Sentiment: Some analysts and financial publications continue to identify APLD as a potential rebound candidate because of accelerating data-center demand, backlog growth, and AI monetization. The reported analyst consensus target is $59.75, while B. Riley still rates the stock “Buy” with a $51 target. Applied Digital consensus target price B. Riley lowered Applied Digital price target
• Neutral Sentiment: Coverage comparing Applied Digital with IREN highlights that both companies face investor concerns about risk, making the sector’s recent weakness broader than a single company-specific issue. Should investors buy IREN instead of Applied Digital
• Negative Sentiment: B. Riley reduced its APLD price target from $75 to $51. Although the firm retained a Buy rating and still sees significant upside, the cut reflects a more cautious outlook and may reinforce near-term investor concerns. B. Riley Applied Digital stock recommendation

Analyst Upgrades and Downgrades

Several analysts recently weighed in on APLD shares. Zacks Research downgraded Applied Digital from a “hold” rating to a “strong sell” rating in a research note on Wednesday, August 26th. Wells Fargo & Company reissued an “overweight” rating and issued a $55.00 target price (up from $50.00) on shares of Applied Digital in a research report on Thursday, October 8th. Citigroup reissued a “market outperform” rating on shares of Applied Digital in a report on Thursday, October 8th. B. Riley Financial lowered their target price on shares of Applied Digital from $75.00 to $51.00 and set a “buy” rating on the stock in a research note on Friday. Finally, Morgan Stanley set a $41.00 price target on Applied Digital and gave the stock an “equal weight” rating in a research note on Friday, October 9th. Three research analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating, two have issued a Hold rating and two have given a Sell rating to the company. According to MarketBeat, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $57.75.

Applied Digital Price Performance

The stock has a 50 day moving average of $24.06 and a 200-day moving average of $31.35. The company has a current ratio of 2.56, a quick ratio of 2.56 and a debt-to-equity ratio of 3.90. The stock has a market capitalization of $5.39 billion, a P/E ratio of -10.87 and a beta of 5.99.

Applied Digital (NASDAQ:APLD) last released its quarterly earnings data on Wednesday, October 7th. The company reported ($0.01) earnings per share (EPS) for the quarter, beating the consensus estimate 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 during the quarter, compared to analysts’ expectations of $116.29 million. During the same period in the previous year, the company earned ($0.03) EPS. The firm’s quarterly revenue was up 367.8% on a year-over-year basis. On average, equities research analysts anticipate that Applied Digital Corporation will post -2.17 earnings per share for the current fiscal year.

Insider Activity

In other Applied Digital news, President Jason Gechen Zhang acquired 300,000 shares of the company’s stock in a transaction dated Friday, October 16th. The shares were acquired at an average cost of $18.86 per share, with a total value of $5,658,000.00. Following the acquisition, the president directly owned 2,839,227 shares of the company’s stock, valued at approximately $53,547,821.22. The trade was a 11.81% increase in their ownership of the stock. The purchase was disclosed in a document filed with the SEC, which is accessible through this link. Also, CEO Wes Cummins acquired 55,803 shares of the firm’s stock in a transaction dated Friday, October 16th. The stock was bought at an average cost of $18.04 per share, with a total value of $1,006,686.12. Following the acquisition, the chief executive officer owned 5,874,453 shares in the company, valued at approximately $105,975,132.12. This trade represents a 0.96% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Corporate insiders own 9.50% of the company’s stock.

Institutional Trading of Applied Digital

Hedge funds and other institutional investors have recently modified their holdings of the stock. Covestor Ltd grew its stake in shares of Applied Digital by 8,660.4% in the 3rd quarter. Covestor Ltd now owns 18,134 shares of the company’s stock valued at $442,000 after purchasing an additional 17,927 shares during the last quarter. Integrity Alliance LLC. purchased a new position in Applied Digital during the third quarter worth about $252,000. Mirae Asset Global Investments Co. Ltd. acquired a new position in Applied Digital in the third quarter valued at $3,666,000. Americana Partners LLC lifted its holdings in shares of Applied Digital by 15.4% during the 3rd quarter. Americana Partners LLC now owns 11,266 shares of the company’s stock valued at $275,000 after acquiring an additional 1,500 shares in the last quarter. Finally, State of Wyoming lifted its position in shares of Applied Digital by 210.4% during the third quarter. State of Wyoming now owns 6,230 shares of the company’s stock worth $152,000 after purchasing an additional 4,223 shares in the last quarter. 65.67% of the stock is owned by institutional investors and hedge funds.

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.