Applied Digital (NASDAQ:APLD) Shares Gap Down – Time to Sell?

Applied Digital Corporation (NASDAQ:APLD)’s stock price gapped down prior to trading on Tuesday. The stock had previously closed at $23.25, but opened at $22.13. Applied Digital shares last traded at $21.6840, with a volume of 6,031,756 shares changing hands.

Applied Digital News Roundup

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

• Positive Sentiment: Applied Digital reported fiscal Q1 2027 revenue of approximately $341.9 million, up 322% year over year. The company also has roughly $36 billion in contracted revenue and plans to bring more than 600 megawatts of capacity online over the next 12 months, supporting the long-term AI infrastructure growth story. What Could Derail Applied Digital Stock?
• Positive Sentiment: Despite lowering its earnings forecasts, Northland Securities maintained an “Outperform” rating and an $82 price target, implying substantial potential upside if Applied Digital executes its expansion plans. Applied Digital analyst estimates
• Neutral Sentiment: The company’s revenue surge is not yet translating into profitability. Fiscal Q1 included a GAAP net loss of about $237.1 million, while rent and other recurring data-center revenue remain a relatively small portion of total sales. Fiscal Q1 2027 revenue analysis
• Negative Sentiment: Northland cut its FY2027 EPS forecast to a $1.50 loss from a $0.44 loss and reduced quarterly estimates, highlighting expectations for sustained losses as construction spending continues. Northland Securities estimates
• Negative Sentiment: Investors remain concerned about how Applied Digital will fund its AI data-center buildout. High leverage, a challenging bond market and potential lender pullbacks could increase interest costs, delay projects or require additional equity financing and dilution. Could Applied Digital Stock Survive Its Lenders Pulling Back?
• Negative Sentiment: Broader selling in AI and data-center stocks also pressured APLD after hotter-than-expected inflation lifted bond yields, making capital-intensive growth companies less attractive. AI and data-center stocks fall

Wall Street Analysts Forecast Growth

Several research firms have recently issued reports on APLD. Wall Street Zen lowered Applied Digital from a “sell” rating to a “strong sell” rating in a research report on Sunday, August 30th. Wells Fargo & Company reaffirmed an “overweight” rating and issued a $55.00 price target (up from $50.00) on shares of Applied Digital in a research note on Thursday, October 8th. UBS Group reiterated a “buy” rating on shares of Applied Digital in a research report on Thursday, October 8th. B. Riley Financial reissued a “buy” rating and set a $75.00 price objective (up from $66.00) on shares of Applied Digital in a research note on Monday, August 3rd. Finally, Morgan Stanley set a $41.00 price objective on shares of 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 assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average target price of $62.25.

Applied Digital Price Performance

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 stock’s 50-day moving average is $26.51 and its 200 day moving average is $32.40.

Applied Digital (NASDAQ:APLD) last issued its quarterly earnings data on Wednesday, October 7th. The company reported ($0.01) EPS for the quarter, topping the consensus estimate of ($0.30) by $0.29. The business had revenue of $300.39 million for the quarter, compared to the consensus estimate of $116.29 million. Applied Digital had a negative return on equity of 27.21% and a negative net margin of 51.28%. The firm’s revenue was up 367.8% compared to the same quarter last year. During the same quarter last year, the business posted ($0.03) EPS. As a group, sell-side analysts forecast that Applied Digital Corporation will post -1.93 earnings per share for the current fiscal year.

Insider Activity

In other news, Director Richard Nottenburg sold 75,000 shares of the firm’s stock in a transaction dated 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 sale, the director owned 133,378 shares of the company’s stock, valued at $4,154,724.70. This trade represents a 35.99% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. 9.50% of the stock is owned by company insiders.

Hedge Funds Weigh In On Applied Digital

Several institutional investors and hedge funds have recently modified their holdings of the business. FNY Investment Advisers LLC acquired a new position in shares of Applied Digital during the 2nd quarter worth about $37,000. Osbon Capital Management LLC bought a new position in shares of Applied Digital in the 4th quarter valued at about $28,000. Bartlett & CO. Wealth Management LLC grew its holdings in shares of Applied Digital by 244.3% in the 1st quarter. Bartlett & CO. Wealth Management LLC now owns 1,205 shares of the company’s stock valued at $29,000 after acquiring an additional 855 shares in the last quarter. Ancora Advisors LLC acquired a new stake in shares of Applied Digital in the second quarter valued at about $56,000. Finally, Creative Financial Designs Inc. ADV increased its position in shares of Applied Digital by 691.8% in the second quarter. Creative Financial Designs Inc. ADV now owns 1,536 shares of the company’s stock valued at $57,000 after acquiring an additional 1,342 shares during the last quarter. 65.67% of the stock is currently 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.