Applied Digital (NASDAQ:APLD) Stock Price Down 9.4% – Should You Sell?

Shares of Applied Digital Corporation (NASDAQ:APLD) fell 9.4% during mid-day trading on Wednesday. The stock traded as low as $20.01 and last traded at $20.33. Approximately 29,816,432 shares traded hands during trading, an increase of 30% from the average daily volume of 22,910,643 shares. The stock had previously closed at $22.44.

Key Headlines Impacting Applied Digital

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

• Positive Sentiment: Applied Digital’s fiscal first-quarter revenue reached $300.4 million, up 367.8% year over year, while its adjusted loss of $0.01 per share was substantially better than the $0.30 loss analysts expected. The results highlight strong demand for its digital-infrastructure services. Applied Digital Fiscal Q1 2027 Revenue Surges
• Positive Sentiment: Several analysts remain constructive on APLD, including Wells Fargo, Citigroup and Needham. The reported analyst consensus is “Moderate Buy,” although price targets vary widely and do not eliminate near-term execution risks. Applied Digital Analyst Ratings
• Neutral Sentiment: Investors are reassessing whether Applied Digital’s valuation is supported by current sales, particularly after the stock’s substantial multiyear advance and the company’s large planned investment in AI data centers. Applied Digital Stock Valuation
• Negative Sentiment: Higher bond yields and renewed scrutiny of financing costs are weighing on debt-funded AI infrastructure companies. Applied Digital’s debt-to-equity ratio of approximately 3.9 makes access to affordable capital especially important as construction expands. Rotation Out of Debt-Funded AI Builders
• Negative Sentiment: Commentary has raised concerns about cash burn, future borrowing capacity and whether lenders will continue funding Applied Digital’s construction pipeline. These risks could delay growth or require additional capital. Applied Digital Financing Risks
• Negative Sentiment: Director Richard Nottenburg sold 31,250 shares for approximately $682,500, reducing his ownership by 23.4%. Although one insider sale is not conclusive, it adds to investor caution during the broader selloff. SEC Insider Transaction Filing
• Negative Sentiment: An analyst reduced the company’s second-quarter EPS estimate, reinforcing concerns that heavy investment and financing expenses may continue to delay profitability. Applied Digital EPS Estimate Reduction

Analyst Ratings Changes

Several research firms recently commented on APLD. B. Riley Financial reiterated a “buy” rating and issued a $75.00 target price (up from $66.00) on shares of Applied Digital in a research note on Monday, August 3rd. Zacks Research downgraded shares of Applied Digital from a “hold” rating to a “strong sell” rating in a research note on Wednesday, August 26th. Wall Street Zen downgraded shares of Applied Digital from a “sell” rating to a “strong sell” rating in a research note on Sunday, August 30th. Citigroup reiterated a “market outperform” rating on shares of Applied Digital in a report on Thursday, October 8th. Finally, Weiss Ratings reissued a “sell (d-)” rating on shares of Applied Digital in a research report on Tuesday, July 21st. Three investment analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, two have given a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus price target of $62.25.

Applied Digital Stock Performance

The stock’s 50-day moving average is $26.34 and its 200-day moving average is $32.37. The stock has a market cap of $5.45 billion, a price-to-earnings ratio of -10.98 and a beta of 5.99. The company has a current ratio of 2.56, a quick ratio of 2.56 and a debt-to-equity ratio of 3.90.

Applied Digital (NASDAQ:APLD) last announced its quarterly 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 firm had revenue of $300.39 million for the quarter, compared to analysts’ expectations of $116.29 million. During the same period in the previous year, the company posted ($0.03) earnings per share. Applied Digital’s revenue was up 367.8% compared to the same quarter last year. On average, analysts expect that Applied Digital Corporation will post -2.06 EPS for the current year.

Insiders Place Their Bets

In other Applied Digital news, Director Richard Nottenburg sold 31,250 shares of Applied Digital stock in a transaction that occurred on Tuesday, October 13th. The stock was sold at an average price of $21.84, for a total transaction of $682,500.00. Following the sale, the director directly owned 102,128 shares in the company, valued at $2,230,475.52. The trade was a 23.43% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. 9.50% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Applied Digital

A number of hedge funds have recently added to or reduced their stakes in the stock. Equitec Proprietary Markets LLC bought a new stake in shares of Applied Digital during the second quarter valued at approximately $312,349,000. Situational Awareness LP boosted its stake in shares of Applied Digital by 18.9% during the 1st quarter. Situational Awareness LP now owns 13,478,438 shares of the company’s stock worth $319,978,000 after acquiring an additional 2,139,378 shares in the last quarter. Hsbc Holdings PLC purchased a new position in Applied Digital in the 4th quarter worth about $29,510,000. Janus Henderson Group PLC raised its holdings in Applied Digital by 318.5% during the 1st quarter. Janus Henderson Group PLC now owns 785,152 shares of the company’s stock worth $18,638,000 after buying an additional 597,548 shares during the period. Finally, TFR Capital LLC. boosted its holdings in shares of Applied Digital by 425.3% in 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 during the period. 65.67% of the stock is currently owned by institutional investors.

Applied Digital Company Profile

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.