Applied Digital (NASDAQ:APLD) Stock Falls 6.7% – Here’s Why

Shares of Applied Digital Corporation (NASDAQ:APLD) traded down 6.7% during mid-day trading on Wednesday. The company traded as low as $16.06 and last traded at $16.61. 34,876,307 shares were traded during trading, an increase of 50% from the average daily volume of 23,212,996 shares. The stock had previously closed at $17.81.

Key Headlines Impacting Applied Digital

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

• Negative Sentiment: After Democrats won control of both chambers of Congress, investors grew concerned about possible tighter regulation, changes to technology tax incentives, and greater scrutiny of data-center projects. Those concerns weighed on APLD and other AI infrastructure stocks, while hyperscalers appeared less affected. AI data center stocks dip as midterm elections shake up Wall Street
• Negative Sentiment: Investor Brad Gerstner warned that Democratic midterm gains could put 10–15 gigawatts of planned AI data-center capacity at risk. That is an industry-level estimate, but it raises uncertainty about project development and future demand for infrastructure providers such as Applied Digital. CRWV, APLD, IREN stocks slip as Brad Gerstner warns Democratic midterm gains could put 10–15 GW of AI data center capacity at risk
• Negative Sentiment: Separate reports linked APLD’s recent weakness and a new 52-week low to an analyst downgrade, adding to negative sentiment. The provided coverage does not specify the analyst’s rationale. Applied Digital stock price down following analyst downgrade Applied Digital hits new 52-week low following analyst downgrade

Wall Street Analyst Weigh In

APLD has been the subject of several recent analyst reports. Wall Street Zen lowered shares of Applied Digital from a “sell” rating to a “strong sell” rating in a report on Sunday, August 30th. Needham & Company LLC decreased their target price on shares of Applied Digital from $83.00 to $70.00 and set a “buy” rating for the company in a research report on Thursday, October 8th. UBS Group restated a “buy” rating on shares of Applied Digital in a research note on Thursday, October 8th. Wells Fargo & Company restated an “overweight” rating and set a $55.00 target price (up from $50.00) on shares of Applied Digital in a research report on Thursday, October 8th. Finally, Citigroup restated a “market outperform” rating on shares of Applied Digital in a research note on Thursday, October 8th. Three analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, two have issued a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $57.75.

Applied Digital Trading Down 6.7%

The firm’s 50 day simple moving average is $23.66 and its two-hundred day simple moving average is $31.15. The company has a quick ratio of 2.56, a current ratio of 2.56 and a debt-to-equity ratio of 3.90. The stock has a market capitalization of $5.02 billion, a P/E ratio of -10.13 and a beta of 5.58.

Applied Digital (NASDAQ:APLD) last issued its quarterly earnings data on Wednesday, October 7th. The company reported ($0.01) earnings per share (EPS) for the quarter, topping 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 business had revenue of $300.39 million during the quarter, compared to the consensus estimate of $116.29 million. During the same period in the prior year, the firm posted ($0.03) EPS. The firm’s quarterly revenue was up 367.8% compared to the same quarter last year. As a group, analysts forecast that Applied Digital Corporation will post -2.17 earnings per share for the current fiscal year.

Insider Buying and Selling at Applied Digital

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

Institutional Investors Weigh In On Applied Digital

Large investors have recently added to or reduced their stakes in the company. Ethic Inc. boosted its position in shares of Applied Digital by 61.8% during the third quarter. Ethic Inc. now owns 18,104 shares of the company’s stock valued at $441,000 after purchasing an additional 6,915 shares in the last quarter. Pictet Asset Management Holding SA grew its stake in Applied Digital by 7.0% in the third quarter. Pictet Asset Management Holding SA now owns 46,904 shares of the company’s stock worth $1,143,000 after purchasing an additional 3,072 shares during the period. Verus Capital Partners LLC bought a new position in Applied Digital in the third quarter worth $243,000. Cannon Capital Management Inc. raised its holdings in Applied Digital by 3.0% in the third quarter. Cannon Capital Management Inc. now owns 151,060 shares of the company’s stock worth $3,681,000 after purchasing an additional 4,371 shares in the last quarter. Finally, CenterBook Partners LP purchased a new position in Applied Digital during the third quarter valued at $2,871,000. Hedge funds and other institutional investors own 65.67% of the company’s stock.

Applied Digital Company Profile

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.