Applied Digital (NASDAQ:APLD) Shares Climb 9.4% – What’s Next?

Applied Digital Corporation (NASDAQ:APLD)’s share price rose 9.4% on Tuesday. The stock traded as high as $19.77 and last traded at $19.51. Approximately 20,202,559 shares were traded during trading, a decline of 13% from the average daily volume of 23,119,492 shares. The stock had previously closed at $17.83.

Applied Digital News Roundup

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

• Positive Sentiment: AI data-center operators rebounded broadly after industry executives pushed back against concerns that demand for AI computing capacity is weakening or that financing problems will leave facilities unfinished. Applied Digital was among the strongest performers in the group. Why Is Applied Digital Stock Surging on Tuesday?
• Positive Sentiment: Investors continue to focus on Applied Digital’s substantial revenue growth and recent quarterly results, which exceeded analyst expectations. One analyst cited in the coverage maintains a highly bullish outlook, implying nearly 400% potential upside based on expected long-term AI infrastructure demand. Applied Digital Keeps Cratering: This Analyst Keeps Insisting It’s Going to Jump by 390%
• Positive Sentiment: Unusually high call-option activity and reported purchases by Applied Digital co-founders may be supporting sentiment by signaling speculative or insider confidence after the stock reached a one-year low. Applied Digital Co-Founders Snap Up Shares
• Neutral Sentiment: The rebound appears to be driven more by sector sentiment than by a new company-specific announcement. Applied Digital remains highly volatile, unprofitable, and leveraged, making execution and access to capital important risks.
• Negative Sentiment: Elon Musk’s warning that debt financing for AI data centers is drying up triggered a selloff in neocloud stocks, including Applied Digital, and raised concerns about overbuilding, funding availability, and future tenant demand. Elon Musk’s Warning Sends Neocloud Stocks Tumbling

Wall Street Analyst Weigh In

APLD has been the subject of a number of analyst reports. 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 research report on Thursday, October 8th. Wall Street Zen lowered Applied Digital from a “sell” rating to a “strong sell” rating in a research note on Sunday, August 30th. Citigroup restated a “market outperform” rating on shares of Applied Digital in a report on Thursday, October 8th. Roth Capital set a $35.00 target price on Applied Digital and gave the stock a “buy” rating in a research note on Wednesday, October 21st. Finally, Zacks Research lowered Applied Digital from a “hold” rating to a “strong sell” rating in a report on Wednesday, August 26th. 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 company. Based on data from MarketBeat, Applied Digital has an average rating of “Moderate Buy” and a consensus price target of $59.75.

Applied Digital Stock Performance

The firm’s fifty day moving average is $25.11 and its 200-day moving average is $31.71. 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 stock has a market capitalization of $5.90 billion, a PE ratio of -11.90 and a beta of 5.99.

Applied Digital (NASDAQ:APLD) last announced its earnings results on Wednesday, October 7th. The company reported ($0.01) earnings per share for the quarter, topping the consensus estimate of ($0.30) by $0.29. The company had revenue of $300.39 million during the quarter, compared to analyst estimates of $116.29 million. Applied Digital had a negative net margin of 51.28% and a negative return on equity of 27.21%. Applied Digital’s revenue was up 367.8% compared to the same quarter last year. During the same quarter last year, the firm posted ($0.03) earnings per share. As a group, research analysts anticipate that Applied Digital Corporation will post -2.17 earnings per share for the current year.

Insider Buying and Selling

In related news, Director Richard Nottenburg sold 75,000 shares of Applied Digital stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $31.15, for a total value of $2,336,250.00. Following the completion of the sale, the director owned 133,378 shares in the company, valued at approximately $4,154,724.70. This trade represents a 35.99% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CEO Wes Cummins purchased 55,803 shares of the firm’s stock in a transaction on Friday, October 16th. The shares were purchased at an average price of $18.04 per share, for a total transaction of $1,006,686.12. Following the completion of the purchase, the chief executive officer directly owned 5,874,453 shares of the company’s stock, valued at $105,975,132.12. This represents a 0.96% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. 9.50% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Digital

Several hedge funds have recently bought and sold shares of the company. GAMMA Investing LLC increased its stake in Applied Digital by 28.5% in the 2nd quarter. GAMMA Investing LLC now owns 2,092 shares of the company’s stock valued at $78,000 after buying an additional 464 shares during the period. Krilogy Financial LLC lifted its stake in shares of Applied Digital by 4.1% in the 2nd quarter. Krilogy Financial LLC now owns 14,243 shares of the company’s stock worth $531,000 after acquiring an additional 561 shares during the period. Envestnet Asset Management Inc. lifted its stake in shares of Applied Digital by 4.7% in the 2nd quarter. Envestnet Asset Management Inc. now owns 13,333 shares of the company’s stock worth $497,000 after acquiring an additional 596 shares during the period. Handelsbanken Fonder AB boosted its holdings in shares of Applied Digital by 1.0% in the second quarter. Handelsbanken Fonder AB now owns 71,600 shares of the company’s stock valued at $2,671,000 after acquiring an additional 700 shares in the last quarter. Finally, Valeo Financial Advisors LLC boosted its holdings in shares of Applied Digital by 6.7% in the third quarter. Valeo Financial Advisors LLC now owns 12,343 shares of the company’s stock valued at $301,000 after acquiring an additional 773 shares in the last quarter. Institutional investors and hedge funds 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.