Applied Digital (NASDAQ:APLD) Shares Down 2.1% - Should You Sell?

Key Points

• Applied Digital shares fell 2.1% to $27.39 amid continued volatility in AI infrastructure stocks; its beta is 5.67 and the price remains below its 50-day and 200-day moving averages.
• The company’s AI data-center revenue surged 406.3% year over year to $240.35 million, but it reported a larger-than-expected quarterly loss of $0.39 per share and remains unprofitable, highlighting execution, financing and capital-spending risks.
• Wall Street sentiment is broadly positive, with an average “Buy” rating and $67.15 consensus price target, although some firms maintain Sell ratings and broader weakness in leveraged AI infrastructure investments remains a risk.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report) shares fell 2.1% during trading on Friday . The company traded as low as $26.94 and last traded at $27.39. 21,887,719 shares were traded during trading, a decline of 11% from the average daily volume of 24,537,156 shares. The stock had previously closed at $27.97.

Applied Digital News Roundup

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

• Positive Sentiment: Favorable analyst views: B. Riley named Applied Digital one of its top high-performance computing (HPC) picks following the sector selloff, suggesting the firm views the recent weakness as an opportunity. B. Riley names Core Scientific and Applied Digital top HPC picks after sector selloff
• Positive Sentiment: Northland maintains an Outperform rating and $82 price target: Northland Securities projects Applied Digital will remain unprofitable through fiscal 2027 but forecasts a narrower full-year loss of $0.44 per share, compared with the current-year consensus loss of $1.10. Its target implies substantial upside from recent trading levels. Northland Securities estimates and rating
• Positive Sentiment: Additional Buy ratings: Lucid Capital initiated or reiterated a Buy view, while Needham reaffirmed its Buy rating, adding to the Wall Street support for Applied Digital’s AI data-center strategy. Applied Digital receives a Buy from Lucid Capital Needham reaffirms Buy rating
• Positive Sentiment: AI data-center growth story: Recent coverage highlighted revenue growth of more than 400% year over year and described Applied Digital as an emerging owner of AI data-center real estate, supporting the long-term demand thesis. As Revenue Surges 400%, Is Applied Digital Stock a Buy?
• Neutral Sentiment: Revenue growth has not yet produced profitability: Applied Digital’s latest quarter showed sharply higher revenue but a larger-than-expected per-share loss, underscoring execution, financing and capital-spending risks.
• Negative Sentiment: Broader AI infrastructure selling remains a headwind: Reports of losses and forced asset transfers among leveraged AI infrastructure investments may keep pressure on highly volatile names such as APLD, despite its positive analyst coverage. Citadel buys Situational Awareness portfolio after AI stock losses

Analysts Set New Price Targets

A number of research firms have recently weighed in on APLD. Citigroup restated a "market outperform" rating on shares of Applied Digital in a report on Tuesday, June 9th. Weiss Ratings reissued a "sell (d-)" rating on shares of Applied Digital in a research report on Tuesday, July 21st. B. Riley Financial restated a "buy" rating and set a $66.00 price objective (up from $53.00) on shares of Applied Digital in a research note on Wednesday, May 27th. Wall Street Zen downgraded shares of Applied Digital from a "hold" rating to a "sell" rating in a report on Saturday, April 11th. Finally, Citizens Jmp upped their target price on shares of Applied Digital from $40.00 to $60.00 and gave the stock a "market outperform" rating in a research note on Thursday, May 21st. Three analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, Applied Digital presently has an average rating of "Buy" and a consensus target price of $67.15.

Applied Digital Stock Performance

The company's 50-day simple moving average is $37.61 and its 200 day simple moving average is $34.39. The company has a current ratio of 2.38, a quick ratio of 2.38 and a debt-to-equity ratio of 1.65. The stock has a market cap of $7.83 billion, a P/E ratio of -30.78 and a beta of 5.67.

Applied Digital (NASDAQ:APLD - Get Free Report) last released 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 business had revenue of $240.35 million during the quarter, compared to the consensus estimate of $96.85 million. Applied Digital had a negative net margin of 37.78% and a negative return on equity of 17.53%. The business's revenue was up 406.3% on a year-over-year basis. During the same period in the prior year, the company earned ($0.24) earnings per share. As a group, sell-side analysts expect that Applied Digital Corporation will post -1.1 EPS for the current fiscal year.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. Vanguard Group Inc. raised its stake in shares of Applied Digital by 36.4% during the 4th quarter. Vanguard Group Inc. now owns 24,168,082 shares of the company's stock worth $592,601,000 after purchasing an additional 6,445,908 shares during the period. Situational Awareness LP increased its holdings in Applied Digital by 18.9% during the first quarter. Situational Awareness LP now owns 13,478,438 shares of the company's stock worth $319,978,000 after buying an additional 2,139,378 shares during the last quarter. Geode Capital Management LLC increased its holdings in Applied Digital by 5.1% during the fourth quarter. Geode Capital Management LLC now owns 6,285,820 shares of the company's stock worth $154,151,000 after buying an additional 304,228 shares during the last quarter. Value Aligned Research Advisors LLC bought a new stake in Applied Digital in the fourth quarter worth about $138,380,000. Finally, BNP Paribas Financial Markets boosted its stake in Applied Digital by 24,356.8% in the second quarter. BNP Paribas Financial Markets now owns 5,219,565 shares of the company's stock valued at $52,561,000 after acquiring an additional 5,198,223 shares during the last quarter. Institutional investors own 65.67% of the company's stock.

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.

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