Wall Street Zen Downgrades Applied Digital (NASDAQ:APLD) to Strong Sell

Key Points

• Wall Street Zen downgraded Applied Digital to “strong sell” from “sell,” adding to recent pressure on the stock.
• Analyst sentiment remains divided: despite the downgrade, the broader consensus is “Moderate Buy” with a $68.15 price target, supported by several buy and strong-buy ratings.
• Applied Digital shares opened at $25.34 after falling 7.7%; the company recently missed quarterly EPS expectations by $0.30, although revenue surged 406.3% year over year to $240.35 million.

Applied Digital (NASDAQ:APLD - Get Free Report) was downgraded by research analysts at Wall Street Zen from a "sell" rating to a "strong sell" rating in a research report issued on Sunday.

A number of other brokerages have also recently issued reports on APLD. Lucid Cap Mkts raised Applied Digital to a "strong-buy" rating in a research note on Wednesday, May 27th. Compass Point reiterated a "buy" rating and issued a $70.00 price target on shares of Applied Digital in a research note on Friday, May 22nd. Morgan Stanley upped their price target on Applied Digital from $36.50 to $37.50 and gave the stock an "equal weight" rating in a research note on Thursday, August 6th. Weiss Ratings reissued a "sell (d-)" rating on shares of Applied Digital in a research report on Tuesday, July 21st. Finally, B. Riley Financial reissued a "buy" rating and issued a $75.00 target price (up from $66.00) on shares of Applied Digital in a report on Monday, August 3rd. Three equities research analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating, one has assigned a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $68.15.

Applied Digital Trading Down 7.7%

NASDAQ:APLD opened at $25.34 on Friday. The stock has a market capitalization of $7.39 billion, a PE ratio of -28.47 and a beta of 5.75. The firm's 50 day moving average is $30.86 and its 200 day moving average is $33.36. The company has a current ratio of 4.01, a quick ratio of 4.01 and a debt-to-equity ratio of 2.88. Applied Digital has a 12 month low of $13.16 and a 12 month high of $50.72.

Applied Digital (NASDAQ:APLD - Get Free Report) last posted its earnings results on Monday, July 27th. The company reported ($0.39) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.09) by ($0.30). The company had revenue of $240.35 million for the quarter, compared to analysts' expectations of $96.85 million. Applied Digital had a negative return on equity of 16.42% and a negative net margin of 37.78%.The company's revenue was up 406.3% on a year-over-year basis. During the same quarter in the prior year, the company earned ($0.24) EPS. Sell-side analysts expect that Applied Digital will post -1.09 earnings per share for the current year.

Insider Activity at Applied Digital

In other Applied Digital news, Director Richard N. Nottenburg sold 75,000 shares of the firm's 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 completion of the transaction, the director owned 133,378 shares in the company, valued at $4,154,724.70. This trade represents a 35.99% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. 9.50% of the stock is owned by company insiders.

Institutional Trading of Applied Digital

A number of large investors have recently made changes to their positions in the stock. AQR Capital Management LLC lifted its stake in shares of Applied Digital by 84.8% during the 1st quarter. AQR Capital Management LLC now owns 18,945 shares of the company's stock worth $106,000 after purchasing an additional 8,692 shares during the last quarter. NewEdge Advisors LLC increased its position in shares of Applied Digital by 239.1% in the 1st quarter. NewEdge Advisors LLC now owns 33,267 shares of the company's stock valued at $187,000 after acquiring an additional 23,457 shares during the period. Geneos Wealth Management Inc. increased its holdings in shares of Applied Digital by 113.3% in the first quarter. Geneos Wealth Management Inc. now owns 6,667 shares of the company's stock valued at $37,000 after purchasing an additional 3,542 shares during the period. Strs Ohio purchased a new position in Applied Digital during the 1st quarter worth approximately $71,000. Finally, Cetera Investment Advisers boosted its holdings in Applied Digital by 61.0% in the second quarter. Cetera Investment Advisers now owns 61,656 shares of the company's stock valued at $621,000 after purchasing an additional 23,360 shares during the last quarter. 65.67% of the stock is owned by hedge funds and other institutional investors.

Trending Headlines about Applied Digital

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

• Positive Sentiment: Applied Digital’s long-term AI data-center leases and expanding project pipeline could support substantial revenue growth over the next several years. One analysis projects significant upside if the company executes on those commitments. Prediction: Applied Digital Stock Will Jump 156% in 3 Years
• Positive Sentiment: Recent enthusiasm for Applied Digital’s AI infrastructure strategy and long-term contracts remains an important bullish factor, despite the stock’s recent weakness. Applied Digital Stock Is Down, But Its AI Data Center Business Is Powering Up
• Neutral Sentiment: Applied Digital has delivered very strong three-year returns, but its valuation remains expensive on sales, meaning the market already reflects substantial optimism about future AI data-center growth. Applied Digital Stock Looks Strong On Returns But Expensive On Sales
• Negative Sentiment: A major impairment charge at IREN, including a writedown tied to older Bitcoin-mining equipment, triggered a broader selloff in capital-intensive AI and data-center stocks. Investors appear concerned about transition costs, execution risk and potential asset write-downs across the sector—even though Applied Digital did not report comparable bad news. Applied Digital Sinks as Data Center Selloff Broadens
• Negative Sentiment: Zacks Research downgraded Applied Digital from “hold” to “strong sell,” adding pressure to investor sentiment. Zacks.com

Applied Digital Company Profile

Applied Digital NASDAQ: APLD is a technology company specializing in the development and operation of large-scale digital infrastructure and sustainable Bitcoin mining solutions. Through its integrated platform, the company designs, builds and manages turnkey data center facilities while also providing comprehensive hosting services for cloud, colocation and enterprise computing needs. Applied Digital's modular approach to facility design enables rapid deployment of capacity and streamlined integration of power, cooling and network connectivity.

In addition to its data center business, Applied Digital operates a network of Bitcoin mining sites that leverage vertically integrated capabilities, including hardware procurement, mining farm engineering, energy management and real-time performance monitoring.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source