Applied Digital (NASDAQ:APLD) Shares Climb 7.7% – Time to Buy?

Applied Digital Corporation (NASDAQ:APLD)’s share price was up 7.7% during trading on Tuesday. The stock traded as high as $19.58 and last traded at $19.1980. Approximately 3,890,115 shares changed hands during trading, a decline of 83% from the average daily volume of 23,039,918 shares. The stock had previously closed at $17.83.

Key Headlines Impacting Applied Digital

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

• Positive Sentiment: Co-founders reportedly purchased approximately $6.7 million of Applied Digital shares near the one-year low, signaling insider confidence in the company’s long-term prospects. Applied Digital Co-Founders Snap Up Shares
• Positive Sentiment: One analyst continues to project nearly 400% upside, arguing that Applied Digital’s AI-infrastructure assets could benefit from long-term demand despite the recent selloff. The company also reported its strongest quarter to date, with revenue surging year over year and earnings exceeding expectations. Analyst Projects Upside for Applied Digital
• Positive Sentiment: Trading data showed call-option volume roughly 49% above normal, suggesting some investors are positioning for a rebound, although options activity can also reflect short-term speculation.
• Neutral Sentiment: A report listed short interest at zero shares and a zero-day-to-cover ratio. That reading appears unusual and may reflect a data or reporting issue, limiting its usefulness as a bullish signal.
• Negative Sentiment: Applied Digital fell to approximately $17.83, its lowest level in a year, highlighting continued selling pressure despite the company’s recent operational performance. Applied Digital Reaches 52-Week Low
• Negative Sentiment: Investor concerns intensified after Elon Musk warned that debt-market funding for AI data centers may be drying up and that some facilities could become stranded. Because Applied Digital is building capital-intensive AI data-center capacity and carries substantial leverage, the warning weighed on sentiment across the sector. Musk Warning Pressures Neocloud Stocks
• Negative Sentiment: Broader concerns about higher interest rates, debt-heavy business models and the risk of oversupply in AI data centers have amplified the stock’s volatility, overshadowing sharply higher revenue and better-than-expected quarterly results. Applied Digital Selloff Analysis

Wall Street Analyst Weigh In

Several brokerages have issued reports on APLD. Wells Fargo & Company restated an “overweight” rating and issued a $55.00 price target (up from $50.00) on shares of Applied Digital in a report on Thursday, October 8th. Weiss Ratings reissued a “sell (d-)” rating on shares of Applied Digital in a research report on Monday, October 19th. UBS Group reaffirmed a “buy” rating on shares of Applied Digital in a research report on Thursday, October 8th. Wall Street Zen lowered Applied Digital from a “sell” rating to a “strong sell” rating in a report on Sunday, August 30th. Finally, Needham & Company LLC dropped their price objective on Applied Digital from $83.00 to $70.00 and set a “buy” rating on the stock in a research note on Thursday, October 8th. Three equities research analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, two have assigned a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $59.75.

Applied Digital Price Performance

The company has a current ratio of 2.56, a quick ratio of 2.56 and a debt-to-equity ratio of 3.90. The company has a 50 day moving average of $25.11 and a 200-day moving average of $31.71. The firm has a market capitalization of $5.84 billion, a P/E ratio of -11.78 and a beta of 5.99.

Applied Digital (NASDAQ:APLD) last announced its earnings results on Wednesday, October 7th. The company reported ($0.01) EPS for the quarter, topping the consensus estimate 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 period last year, the firm earned ($0.03) earnings per share. The business’s revenue for the quarter was up 367.8% on a year-over-year basis. On average, sell-side analysts predict that Applied Digital Corporation will post -2.17 EPS for the current year.

Insider Activity

In other news, President Jason Gechen Zhang bought 300,000 shares of the company’s stock in a transaction on Friday, October 16th. The stock was purchased at an average cost of $18.86 per share, for a total transaction of $5,658,000.00. Following the completion of the transaction, the president owned 2,839,227 shares of the company’s stock, valued at $53,547,821.22. This trade represents a 11.81% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available at this link. Also, Director Richard Nottenburg sold 75,000 shares of Applied Digital stock in a transaction that occurred on 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 in the company, valued at approximately $4,154,724.70. This represents a 35.99% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 9.50% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Applied Digital

Several institutional investors and hedge funds have recently made changes to their positions in APLD. Situational Awareness LP raised its holdings 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 valued at $574,000 after purchasing an additional 1,906,178 shares during the period. Equitec Proprietary Markets LLC acquired a new stake in Applied Digital in the second quarter valued at approximately $312,349,000. Hsbc Holdings PLC increased its holdings 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 valued at $28,377,000 after acquiring an additional 72,460 shares in the last quarter. Sei Investments Co. increased its holdings 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 valued at $25,964,000 after acquiring an additional 271,618 shares in the last quarter. Finally, Janus Henderson Group PLC raised 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 worth $18,638,000 after purchasing an additional 597,548 shares during the period. 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.