Applied Digital (NASDAQ:APLD) Stock Rating Lowered by Zacks Research

Key Points

• Zacks Research downgraded Applied Digital (NASDAQ:APLD) from a hold to a strong sell, and shares fell roughly 8% after opening at $25.57.
• Q3 results showed a revenue beat — $108.6M vs. ~$78.5M consensus and revenue up ~139% YoY — but the company missed EPS (‑$0.36 vs. ‑$0.13) and posted a wider GAAP loss driven by one‑time charges and stock‑based compensation.
• Insider selling has been notable (CEO sold 165,000 shares; insiders sold ~244,593 shares worth about $9.0M in the last 90 days), and investors remain wary of the company’s expansion‑driven leverage and rising interest‑cost risk.

Applied Digital (NASDAQ:APLD - Get Free Report) was downgraded by Zacks Research from a "hold" rating to a "strong sell" rating in a note issued to investors on Wednesday,Zacks.com reports.

Other research analysts have also issued reports about the stock. Texas Capital raised shares of Applied Digital to a "strong-buy" rating in a research note on Tuesday, January 20th. Citigroup reissued an "outperform" rating on shares of Applied Digital in a research note on Wednesday, January 28th. Northland Securities set a $56.00 target price on shares of Applied Digital in a research note on Wednesday, January 28th. Citizens Jmp reaffirmed a "market outperform" rating and issued a $40.00 price objective on shares of Applied Digital in a research note on Thursday. Finally, Arete Research initiated coverage on shares of Applied Digital in a research note on Wednesday, January 7th. They issued a "buy" rating on the stock. Two equities research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and two have issued a Sell rating to the company's stock. According to data from MarketBeat.com, Applied Digital presently has an average rating of "Moderate Buy" and an average price target of $39.20.

Applied Digital Stock Down 8.0%

Shares of NASDAQ APLD opened at $25.57 on Wednesday. The firm has a market cap of $7.15 billion, a PE ratio of -34.55 and a beta of 7.25. Applied Digital has a 12-month low of $3.31 and a 12-month high of $42.27. The company's fifty day simple moving average is $29.04 and its 200 day simple moving average is $29.44. The company has a quick ratio of 4.82, a current ratio of 4.82 and a debt-to-equity ratio of 1.79.

Applied Digital (NASDAQ:APLD - Get Free Report) last issued its earnings results on Wednesday, April 8th. The company reported ($0.36) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.13) by ($0.23). The company had revenue of $108.55 million for the quarter, compared to the consensus estimate of $78.47 million. Applied Digital had a negative return on equity of 18.24% and a negative net margin of 52.84%.The firm's revenue was up 139.3% compared to the same quarter last year. During the same period in the prior year, the company earned ($0.08) earnings per share. As a group, sell-side analysts forecast that Applied Digital will post -0.96 earnings per share for the current fiscal year.

Insider Buying and Selling at Applied Digital

In other Applied Digital news, CEO Wes Cummins sold 165,000 shares of the firm's stock in a transaction on Friday, January 16th. The shares were sold at an average price of $36.42, for a total value of $6,009,300.00. Following the transaction, the chief executive officer directly owned 4,176,329 shares of the company's stock, valued at approximately $152,101,902.18. This trade represents a 3.80% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Richard N. Nottenburg sold 12,000 shares of the firm's stock in a transaction on Thursday, January 15th. The shares were sold at an average price of $35.45, for a total transaction of $425,400.00. Following the completion of the transaction, the director directly owned 233,378 shares in the company, valued at $8,273,250.10. This trade represents a 4.89% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 244,593 shares of company stock valued at $9,003,278 over the last ninety days. 9.50% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in the business. Teachers Retirement System of The State of Kentucky purchased a new stake in shares of Applied Digital in the third quarter valued at about $994,000. Voya Investment Management LLC raised its holdings in shares of Applied Digital by 403.4% in the third quarter. Voya Investment Management LLC now owns 1,464,909 shares of the company's stock valued at $33,605,000 after purchasing an additional 1,173,929 shares during the last quarter. Federated Hermes Inc. purchased a new stake in shares of Applied Digital in the third quarter valued at about $3,204,000. AlphaQuest LLC purchased a new stake in shares of Applied Digital in the third quarter valued at about $1,369,000. Finally, MRA Advisory Group purchased a new stake in shares of Applied Digital in the third quarter valued at about $978,000. 65.67% of the stock is owned by institutional investors.

Applied Digital News Summary

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

• Positive Sentiment: Q3 revenue and demand beat — Applied Digital reported a large revenue beat and said AI/data‑center demand is accelerating, supporting long‑term capacity growth. Applied Digital beats quarterly revenue estimates
• Positive Sentiment: Analysts remain constructive — Several analysts reiterated bullish views and some see the pullback as a buy‑on‑weakness opportunity, including a reaffirmed “market outperform” with a $40 price target from one shop. Applied Digital slumps after Q3 results; analysts await new lease
• Neutral Sentiment: Earnings call / transcript available — Management provided operational color on campus builds, lease ramps and future capacity in the Q3 transcript; investors are parsing lease timing and cadence for revenue conversion. Applied Digital (APLD) Q3 2026 Earnings Transcript
• Negative Sentiment: Wider GAAP loss / EPS miss — The company posted a larger‑than‑expected net loss (EPS miss) despite revenue up ~139% YoY; one‑time charges and stock‑based comp materially widened the GAAP loss and pressured the headline number. Applied Digital Q3 Loss Wider Than Expected, Revenues Rise Y/Y
• Negative Sentiment: Spin‑off / write‑down charges spooked traders — Coverage notes a spin‑off related charge and hefty write‑downs/stock comp that triggered the intraday sell‑off despite the revenue beat. Those non‑cash and one‑time items are weighing on near‑term sentiment. Why Applied Digital Stock Is Tanking Today
• Negative Sentiment: Leverage and interest‑cost risk — Investors are also focused on rising interest costs and the company’s heavy expansion/debt profile, which could pressure margins and cash flow as it builds toward a large MW pipeline. Can APLD Navigate Rising Interest Costs Amid Rapid Expansion Plans?

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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