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

Applied Digital Corporation (NASDAQ:APLD) shares dropped 2.7% during mid-day 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 Applied Digital News

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

• Positive Sentiment: Applied Digital brought an additional 75 megawatts of critical IT capacity online at Polaris Forge 1, lifting the campus to 250 MW of operational capacity. The expansion strengthens the company’s ability to serve AI customers and supports expectations for future revenue growth. Applied Digital capacity article
• Positive Sentiment: A Seeking Alpha analysis argues that the accelerated Polaris Forge 1 buildout and strong AI infrastructure spending could support higher revenue and a valuation re-rating. It estimates potential upside if Applied Digital reaches its growth targets. Applied Digital capacity expansion analysis
• Positive Sentiment: Two of three AI chatbots selected APLD as a leading stock pick for the week and anticipate that the upcoming earnings report could lift shares. This is sentiment-driven rather than fundamental evidence, but it may increase short-term investor interest. AI chatbot stock picks
• Neutral Sentiment: Analysts collectively maintain a “Moderate Buy” recommendation, while investors await results expected to show approximately $258.7 million in revenue and a $0.39 per-share loss. Elevated options volatility indicates the report could produce a significant move. Analyst recommendation
• Negative Sentiment: Zacks added Applied Digital to its Rank #5 “Strong Sell” list, creating a notable counterpoint to the bullish capacity narrative. Zacks Strong Sell list
• Negative Sentiment: Shares are facing selling pressure alongside other AI data-center operators despite the new capacity milestone. Rising Treasury yields and broader market caution may also be reducing appetite for high-beta, loss-making growth stocks.

Wall Street Analyst Weigh In

A number of research analysts have weighed in on APLD shares. Northland Securities set a $82.00 price target on Applied Digital and gave the company an “outperform” rating in a research note on Wednesday, June 17th. Wall Street Zen downgraded Applied Digital from a “sell” rating to a “strong sell” rating in a report on Sunday, August 30th. Weiss Ratings reissued a “sell (d-)” rating on shares of Applied Digital in a research note on Tuesday, July 21st. Morgan Stanley boosted their target price on shares of Applied Digital from $36.50 to $37.50 and gave the stock an “equal weight” rating in a report on Thursday, August 6th. Finally, Needham & Company LLC reaffirmed a “buy” rating and set a $83.00 price target on shares of Applied Digital in a research report on Tuesday, July 28th. Three analysts have rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating, two have issued a Hold rating and two have given a Sell rating to the company’s stock. Based on data from MarketBeat, Applied Digital presently has an average rating of “Moderate Buy” and a consensus price target of $60.88.

Applied Digital Trading Down 2.7%

The business has a fifty day simple moving average of $27.20 and a 200 day simple moving average of $32.59. The stock has a market capitalization of $7.20 billion, a price-to-earnings ratio of -27.75 and a beta of 5.99. The company has a debt-to-equity ratio of 2.88, a quick ratio of 4.01 and a current ratio of 4.01.

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

Insider Activity at Applied Digital

In other news, Director Richard Nottenburg sold 75,000 shares of the stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $31.15, for a total value of $2,336,250.00. Following the completion of the transaction, the director owned 133,378 shares of the company’s stock, valued at approximately $4,154,724.70. This represents a 35.99% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Company insiders own 9.50% of the company’s stock.

Institutional Trading of Applied Digital

A number of hedge funds have recently made changes to their positions in APLD. Situational Awareness LP grew its holdings 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 worth $574,000 after purchasing an additional 1,906,178 shares during the last quarter. Equitec Proprietary Markets LLC bought a new position in Applied Digital in the 2nd quarter valued at approximately $312,349,000. Hsbc Holdings PLC boosted its position in Applied Digital by 6.2% during the 1st quarter. Hsbc Holdings PLC now owns 1,240,239 shares of the company’s stock worth $28,377,000 after buying an additional 72,460 shares during the period. Sei Investments Co. raised its stake in shares of Applied Digital by 33.0% during the first quarter. Sei Investments Co. now owns 1,093,701 shares of the company’s stock valued at $25,964,000 after acquiring an additional 271,618 shares during the last quarter. Finally, Next Century Growth Investors LLC raised its stake in shares of Applied Digital by 30.7% during the fourth quarter. Next Century Growth Investors LLC now owns 797,237 shares of the company’s stock valued at $19,548,000 after acquiring an additional 187,044 shares during 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, 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.