Roth Capital Begins Coverage on Applied Digital (NASDAQ:APLD)

Investment analysts at Roth Capital assumed coverage on shares of Applied Digital (NASDAQ:APLD) in a research report issued on Wednesday, Marketbeat Ratings reports. The firm set a “buy” rating and a $35.00 price target on the stock. Roth Capital‘s target price would suggest a potential upside of 83.03% from the company’s current price.

Other research analysts have also recently issued reports about the company. Wall Street Zen cut Applied Digital from a “sell” rating to a “strong sell” rating in a research note on Sunday, August 30th. Wells Fargo & Company reissued an “overweight” rating and issued a $55.00 target price (up from $50.00) on shares of Applied Digital in a research note on Thursday, October 8th. Weiss Ratings reissued a “sell (d-)” rating on shares of Applied Digital in a research note on Monday. Zacks Research cut Applied Digital from a “hold” rating to a “strong sell” rating in a research note on Wednesday, August 26th. Finally, Citigroup reissued a “market outperform” rating on shares of Applied Digital in a research note on Thursday, October 8th. Four equities research analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating, two have issued a Hold rating and two have assigned a Sell rating to the company’s stock. According to MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $59.75.

Applied Digital Trading Down 8.9%

NASDAQ:APLD traded down $1.86 on Wednesday, reaching $19.12. The company’s stock had a trading volume of 24,059,681 shares, compared to its average volume of 23,108,830. Applied Digital has a 1-year low of $17.65 and a 1-year high of $50.72. The company has a debt-to-equity ratio of 3.90, a quick ratio of 2.56 and a current ratio of 2.56. The firm has a market cap of $5.78 billion, a PE ratio of -11.66 and a beta of 5.99. The business’s 50-day moving average price is $25.51 and its two-hundred day moving average price is $32.26.

Applied Digital (NASDAQ:APLD) last posted its earnings results on Wednesday, October 7th. The company reported ($0.01) earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($0.30) by $0.29. Applied Digital had a negative return on equity of 27.21% and a negative net margin of 51.28%. The firm had revenue of $300.39 million during the quarter, compared to analysts’ expectations of $116.29 million. During the same period in the previous year, the firm earned ($0.03) earnings per share. The company’s revenue was up 367.8% on a year-over-year basis. Equities research analysts anticipate that Applied Digital will post -2.06 earnings per share for the current fiscal year.

Insider Transactions at Applied Digital

In other news, Director Richard Nottenburg sold 75,000 shares of the company’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 completion of the transaction, the director directly owned 133,378 shares of the company’s stock, valued at $4,154,724.70. This represents a 35.99% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Wes Cummins acquired 55,803 shares of Applied Digital stock in a transaction dated Friday, October 16th. The shares were purchased at an average cost of $18.04 per share, with a total value of $1,006,686.12. Following the completion of the transaction, the chief executive officer directly owned 5,874,453 shares of the company’s stock, valued at $105,975,132.12. This trade represents a 0.96% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. 9.50% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of the company. Situational Awareness LP boosted its position 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 buying an additional 1,906,178 shares during the period. Equitec Proprietary Markets LLC acquired a new position in shares of Applied Digital during the second quarter worth about $312,349,000. Hsbc Holdings PLC boosted its position in shares of Applied Digital by 6.2% during the first 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. boosted its position 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 worth $25,964,000 after buying an additional 271,618 shares during the period. Finally, Janus Henderson Group PLC boosted its position in 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 during the last quarter. 65.67% of the stock is owned by institutional investors and hedge funds.

Key Applied Digital News

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

• Positive Sentiment: Applied Digital and Soluna Holdings agreed to develop a 50-megawatt AI and high-performance-computing data center at the Dorothy 3 site in Texas. Applied Digital will own 51% of the joint venture, expanding its pipeline of AI infrastructure capacity. Soluna Agrees to Form Strategic Partnership With Applied Digital
• Positive Sentiment: The facility is expected to use power from a nearby wind farm, supporting Applied Digital’s positioning in power-constrained and lower-carbon AI data-center development. Applied’s majority-owned neocloud business, ChronoScale, also signed a nonbinding letter of intent to lease the site, potentially providing an internal customer. Soluna and Applied Digital to Build Wind-Powered AI Data Center
• Positive Sentiment: Analyst sentiment improved: Roth MKM reinstated coverage with a Buy rating and a $35 price target, while Roth Capital subsequently upgraded Applied Digital to Strong Buy. These calls indicate substantial perceived upside after the stock’s steep decline over the past year. Roth MKM Reinstates Applied Digital at Buy
• Positive Sentiment: A report also cited recent insider buying, which can reinforce investor confidence that management views the lower share price as attractive. Applied Digital Shares Gap Up After Insider Buying
• Neutral Sentiment: The stock’s recent rally was part of a broader AI data-center trade driven by expectations of severe power shortages and strong demand for computing capacity, rather than solely by company-specific results. That makes the shares especially sensitive to sentiment and profit-taking. AI Data-Center Stocks Rally on Power Demand
• Negative Sentiment: Rosenblatt lowered Soluna’s price target, saying the Dorothy 3 agreement provides less revenue than previously modeled. Although Soluna’s equity contribution falls to roughly $62 million and may avoid new share issuance, the lower economics raise questions about the venture’s profitability and potential returns for Applied Digital. Rosenblatt Cuts Soluna Target After Applied Digital Joint Venture
• Negative Sentiment: Applied Digital remains loss-making and highly leveraged, with a negative earnings profile and debt-to-equity ratio near 3.9. Investors may therefore be using the post-rally pullback to reassess execution, financing and dilution risks.

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.