Applied Digital (NASDAQ:APLD) Shares Down 8% Following Weak Earnings

Key Points

• EPS miss and stock hit: Shares fell about 8% after Applied Digital reported a GAAP loss of ($0.36) per share, missing the consensus (~($0.13)) by $0.23, with heavy intraday volume as investors reacted to the wider-than-expected loss and non‑cash charges.
• Revenue and demand strength: Q3 revenue topped estimates at $108.6M vs. $78.5M expected, up ~139% year‑over‑year, driven by HPC/AI data‑center demand and large hyperscaler/long‑term lease commitments.
• Risks and mixed sentiment: Rapid expansion (including ~500MW buildout commitments) has raised debt and interest‑cost concerns and higher volatility, while analysts remain mixed—consensus leans Buy with an average price target near $39.20—and insiders have been net sellers.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s share price traded down 8% during trading on Thursday following a dissappointing earnings announcement. The stock traded as low as $25.07 and last traded at $25.57. 35,541,270 shares traded hands during mid-day trading, an increase of 31% from the average session volume of 27,151,771 shares. The stock had previously closed at $27.79.

The company reported ($0.36) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.13) by ($0.23). Applied Digital had a negative net margin of 43.49% and a negative return on equity of 13.53%. The firm had revenue of $108.55 million for the quarter, compared to analysts' expectations of $78.47 million. During the same period in the previous year, the company posted ($0.08) EPS. The business's quarterly revenue was up 139.3% on a year-over-year basis.

Key Headlines Impacting Applied Digital

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

• Positive Sentiment: Revenue and demand beat — Q3 revenue surged ~139% y/y (driven by HPC/AI data-center demand and hyperscaler deals), topping estimates and signaling strong secular demand for the company’s capacity. Zacks: Q3 Revenues Rise
• Positive Sentiment: Long-term commercial traction — multiple reports highlight large hyperscaler and long-term lease commitments that support revenue runway and the company’s expansion thesis. Reuters: Revenue Beat
• Neutral Sentiment: Analyst support vs. mixed ratings — Citizens Jmp reaffirmed a market outperform rating with a $40 PT, offering upside narrative, while Zacks added APLD to a Strong Sell list; this creates mixed sell-side signals. Benzinga: Price Target Zacks: Strong Sell List
• Neutral Sentiment: Elevated options & volume — unusually large call activity and heavy share volume indicate active positioning and higher volatility (can amplify moves in either direction). (Reported after-hours/options flow)
• Negative Sentiment: Wider-than-expected GAAP loss — APLD reported a net loss of $0.36/sh (vs. consensus ~ -$0.10 to -$0.13), a larger-than-expected EPS miss that pressured sentiment despite the revenue beat. Proactive: Earnings Reaction
• Negative Sentiment: Non‑cash charges and stock‑based comp weighed results — investors focused on large write‑downs and elevated stock‑based compensation that drove the bigger loss and cloud near‑term profitability. Schaeffers: Q3 Net Loss
• Negative Sentiment: Balance-sheet & interest‑cost risk — rapid expansion (500MW buildout commitments) has increased debt and interest exposure, raising concerns about cash flow coverage and margin pressure as interest rates rise. Zacks: Debt/Interest Concerns

Analysts Set New Price Targets

Several equities analysts recently commented on the company. Wall Street Zen upgraded Applied Digital from a "sell" rating to a "hold" rating in a research note on Saturday, January 10th. Needham & Company LLC restated a "buy" rating and issued a $41.00 price target on shares of Applied Digital in a report on Thursday, January 8th. Northland Securities set a $56.00 price objective on shares of Applied Digital in a research note on Wednesday, January 28th. B. Riley Financial raised their target price on shares of Applied Digital to $53.00 and gave the stock a "buy" rating in a research report on Friday, January 9th. Finally, Citizens Jmp restated a "market outperform" rating and issued a $40.00 target price on shares of Applied Digital in a report on Thursday. Two research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat.com, Applied Digital has a consensus rating of "Buy" and an average price target of $39.20.

Insider Buying and Selling at Applied Digital

In related news, Director Chuck Hastings sold 45,987 shares of the stock in a transaction on Thursday, January 29th. The stock was sold at an average price of $38.57, for a total value of $1,773,718.59. Following the completion of the sale, the director directly owned 388,372 shares in the company, valued at approximately $14,979,508.04. This represents a 10.59% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Richard N. Nottenburg sold 12,000 shares of the company's stock in a transaction dated Thursday, January 15th. The stock was sold at an average price of $35.45, for a total value of $425,400.00. Following the completion of the sale, the director directly owned 233,378 shares of the company's stock, valued at $8,273,250.10. The trade was a 4.89% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 244,593 shares of company stock worth $9,003,278 over the last three months. 9.50% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Applied Digital

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. Newbridge Financial Services Group Inc. lifted its stake in shares of Applied Digital by 8.6% in the fourth quarter. Newbridge Financial Services Group Inc. now owns 3,800 shares of the company's stock worth $93,000 after acquiring an additional 300 shares in the last quarter. Concurrent Investment Advisors LLC grew its stake in Applied Digital by 1.5% during the 4th quarter. Concurrent Investment Advisors LLC now owns 21,332 shares of the company's stock valued at $523,000 after purchasing an additional 318 shares in the last quarter. Brookstone Capital Management increased its holdings in Applied Digital by 3.6% during the 4th quarter. Brookstone Capital Management now owns 9,275 shares of the company's stock worth $227,000 after purchasing an additional 321 shares during the last quarter. ProShare Advisors LLC increased its holdings in Applied Digital by 1.0% during the 3rd quarter. ProShare Advisors LLC now owns 36,652 shares of the company's stock worth $841,000 after purchasing an additional 376 shares during the last quarter. Finally, Independent Advisor Alliance raised its position in shares of Applied Digital by 4.6% in the 4th quarter. Independent Advisor Alliance now owns 9,215 shares of the company's stock valued at $226,000 after purchasing an additional 407 shares in the last quarter. 65.67% of the stock is owned by hedge funds and other institutional investors.

Applied Digital Stock Performance

The company has a debt-to-equity ratio of 1.79, a quick ratio of 4.82 and a current ratio of 4.82. The company has a market capitalization of $7.15 billion, a PE ratio of -47.35 and a beta of 7.25. The company has a 50 day moving average price of $29.29 and a 200 day moving average price of $29.47.

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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