Applied Digital (NASDAQ:APLD) Stock Price Up 8.5% – Here’s Why

Shares of Applied Digital Corporation (NASDAQ:APLD) shot up 8.5% during trading on Wednesday. The company traded as high as $21.56 and last traded at $20.98. Approximately 28,822,911 shares were traded during trading, an increase of 25% from the average session volume of 23,101,943 shares. The stock had previously closed at $19.33.

Applied Digital News Roundup

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

• Positive Sentiment: AI infrastructure stocks rallied after data-center executives emphasized that electricity demand remains extremely strong. The comments, including a pledge to avoid equity dilution, eased concerns about the funding burden facing capital-intensive developers and lifted sentiment toward Applied Digital. Power Demand Supports AI Data-Center Stocks
• Positive Sentiment: Applied Digital and Soluna Holdings agreed to form a joint venture to develop a 50-megawatt, wind-powered AI and high-performance-computing data center in Texas. Applied Digital will own 51%, while its majority-owned neocloud ChronoScale has signed a non-binding letter of intent to lease the site, expanding the company’s power-backed AI capacity. Soluna and Applied Digital Texas Data Center Partnership
• Positive Sentiment: Roth/MKM reinstated coverage of Applied Digital with a “Buy” rating. The call added to optimism around the company’s contracted backlog and long-term opportunity from continued AI infrastructure spending. Roth MKM Buy Rating
• Positive Sentiment: CEO Wes Cummins and President Jason Gechen Zhang bought approximately $6.66 million of Applied Digital shares after the recent selloff. The open-market purchases may signal management confidence in the company’s growth prospects and contracted backlog. Applied Digital Executives Buy Stock
• Neutral Sentiment: The broader AI buildout remains a significant potential tailwind. Analysts argue that spending on AI infrastructure is still in its early stages, but investors continue to debate whether neocloud companies can earn adequate returns on their heavy capital investments. AI Buildout Investment Outlook
• Negative Sentiment: Applied Digital remains unprofitable and highly leveraged. Recent results showed rapid revenue growth but a substantial net loss, while high interest expense and ongoing data-center construction needs could pressure cash flow and raise future financing or dilution concerns.

Analyst Upgrades and Downgrades

Several brokerages have recently weighed in on APLD. Wall Street Zen cut shares of Applied Digital from a “sell” rating to a “strong sell” rating in a research note on Sunday, August 30th. Needham & Company LLC reduced their price objective on Applied Digital from $83.00 to $70.00 and set a “buy” rating for the company in a research note on Thursday, October 8th. Roth Capital set a $35.00 price objective on Applied Digital and gave the stock a “buy” rating in a research note on Wednesday. Zacks Research cut Applied Digital from a “hold” rating to a “strong sell” rating in a report on Wednesday, August 26th. Finally, Weiss Ratings reiterated a “sell (d-)” rating on shares of Applied Digital in a research report on Monday. Three research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, two have given a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and a consensus target price of $59.75.

Applied Digital Trading Up 8.5%

The stock’s 50-day simple moving average is $25.71 and its two-hundred day simple moving average is $32.29. 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 firm has a market capitalization of $6.34 billion, a P/E ratio of -12.79 and a beta of 5.99.

Applied Digital (NASDAQ:APLD) last released its earnings results on Wednesday, October 7th. The company reported ($0.01) earnings per share for the quarter, beating 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 analysts’ expectations of $116.29 million. During the same quarter in the previous year, the company earned ($0.03) EPS. Applied Digital’s revenue for the quarter was up 367.8% on a year-over-year basis. Equities research analysts expect that Applied Digital Corporation will post -2.06 EPS for the current year.

Insider Activity

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

Hedge Funds Weigh In On Applied Digital

Several hedge funds have recently modified their holdings of the stock. Situational Awareness LP increased its holdings in Applied Digital by 14.1% in the 2nd quarter. Situational Awareness LP now owns 15,384,616 shares of the company’s stock valued at $574,000 after acquiring an additional 1,906,178 shares during the last quarter. Equitec Proprietary Markets LLC bought a new position in shares of Applied Digital during the 2nd quarter valued at about $312,349,000. Hsbc Holdings PLC boosted its holdings in shares of Applied Digital by 6.2% during the 1st quarter. Hsbc Holdings PLC now owns 1,240,239 shares of the company’s stock valued at $28,377,000 after purchasing an additional 72,460 shares during the last quarter. Sei Investments Co. boosted its holdings in shares of Applied Digital by 33.0% during the 1st quarter. Sei Investments Co. now owns 1,093,701 shares of the company’s stock valued at $25,964,000 after purchasing an additional 271,618 shares during the last quarter. Finally, Janus Henderson Group PLC grew its position in shares of Applied Digital by 318.5% during the first quarter. Janus Henderson Group PLC now owns 785,152 shares of the company’s stock valued at $18,638,000 after purchasing an additional 597,548 shares in the last quarter. Hedge funds and other institutional investors 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.