Applied Digital (NASDAQ:APLD) Reaches New 12-Month Low – Should You Sell?

Applied Digital Corporation (NASDAQ:APLD)’s share price reached a new 52-week low on Monday. The stock traded as low as $17.53 and last traded at $17.6970, with a volume of 2,196,278 shares trading hands. The stock had previously closed at $18.25.

Applied Digital News Roundup

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

• Positive Sentiment: Applied Digital’s co-founders reportedly purchased approximately $6.7 million of shares near a one-year low, while senior executives also began buying after the sharp decline. The insider conviction is supporting the rebound. Applied Digital Co-Founders Snap Up Shares
• Positive Sentiment: Data-center operators rallied as technology stocks recovered and investors pushed back against concerns that AI demand or funding is weakening. Applied Digital benefited from the sector-wide move alongside other former cryptocurrency miners transitioning toward AI infrastructure. Why Is Applied Digital Stock Surging?
• Positive Sentiment: Unusually heavy call-option activity, with 120,826 calls purchased versus typical volume of 80,978, indicates increased short-term speculative interest in a recovery.
• Positive Sentiment: A recent quarterly report showed record revenue and a substantial year-over-year increase, while adjusted earnings exceeded expectations. One analyst continues to project substantial long-term upside, based on expected growth in AI data-center capacity. Analyst Sees Significant Upside
• Neutral Sentiment: The stock recently reached a fresh 52-week low, highlighting both the potential for a technical rebound and the market’s continuing skepticism about the company’s outlook.
• Negative Sentiment: Investors remain concerned about Applied Digital’s high debt burden, funding availability for AI data centers, and the need to meet a critical construction deadline. Elon Musk’s warning that debt markets could leave AI facilities unfinished intensified those concerns across the sector. Musk Warning Sends Neocloud Stocks Lower

Analysts Set New Price Targets

APLD has been the topic of a number of research reports. Zacks Research lowered Applied Digital from a “hold” rating to a “strong sell” rating in a report on Wednesday, August 26th. UBS Group reaffirmed a “buy” rating on shares of Applied Digital in a report on Thursday, October 8th. Rothschild & Co Redburn set a $22.00 target price on Applied Digital and gave the company a “neutral” rating in a research report on Monday, September 21st. Wall Street Zen downgraded shares of Applied Digital from a “sell” rating to a “strong sell” rating in a report on Sunday, August 30th. Finally, Needham & Company LLC cut their price target on shares of Applied Digital from $83.00 to $70.00 and set a “buy” rating on the stock in a report on Thursday, October 8th. Three research 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 company’s stock. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average price target of $59.75.

Applied Digital Price Performance

The firm’s fifty day simple moving average is $24.61 and its 200 day simple moving average is $31.60.

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, topping the consensus estimate of ($0.30) by $0.29. The company had revenue of $300.39 million for the quarter, compared to analyst estimates of $116.29 million. Applied Digital’s revenue for the quarter was up 367.8% on a year-over-year basis. During the same period in the prior year, the business posted ($0.03) earnings per share. As a group, equities research analysts anticipate that Applied Digital Corporation will post -2.17 EPS for the current year.

Insider Buying and Selling

In related news, President Jason Gechen Zhang acquired 300,000 shares of the stock in a transaction on Friday, October 16th. The shares were acquired at an average price of $18.86 per share, for a total transaction of $5,658,000.00. Following the transaction, the president owned 2,839,227 shares in the company, valued at approximately $53,547,821.22. This trade represents a 11.81% increase in their position. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Richard Nottenburg sold 31,250 shares of the firm’s 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 SEC filing for this sale provides additional information. 9.50% of the stock is owned by corporate insiders.

Institutional Trading of Applied Digital

Hedge funds have recently added to or reduced their stakes in the company. Equitec Proprietary Markets LLC purchased a new position in Applied Digital in the second quarter valued at $312,349,000. Situational Awareness LP grew its position 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 valued at $319,978,000 after acquiring an additional 2,139,378 shares during the period. Hsbc Holdings PLC acquired a new stake in shares of Applied Digital during the 4th quarter valued at about $29,510,000. Janus Henderson Group PLC increased its stake in shares of Applied Digital by 318.5% in the 1st 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 in the last quarter. Finally, TFR Capital LLC. increased its stake in shares of Applied Digital by 425.3% in the 1st quarter. TFR Capital LLC. now owns 372,960 shares of the company’s stock valued at $9,497,000 after purchasing an additional 301,954 shares in the last quarter. 65.67% of the stock is owned by hedge funds and other institutional investors.

About Applied Digital

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.