Applied Digital (NASDAQ:APLD) Trading Down 7.1% - Here's What Happened

Key Points

• Applied Digital shares fell about 7.1% on Wednesday, trading as low as $38.63 amid lighter volume than usual, after closing the previous session at $41.91.
• The stock’s decline came despite positive business updates, including a 210 MW hyperscaler lease that could add about $5.2 billion in revenue and lift contracted backlog to roughly $36 billion across five campuses.
• Analyst sentiment remains mixed: several firms raised price targets after the deal, but Zacks Research downgraded the stock from hold to strong sell, citing valuation and execution concerns.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s stock price dropped 7.1% during trading on Wednesday . The company traded as low as $38.63 and last traded at $38.92. Approximately 20,855,203 shares were traded during mid-day trading, a decline of 19% from the average daily volume of 25,797,840 shares. The stock had previously closed at $41.91.

Applied Digital News Roundup

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

• Positive Sentiment: Applied Digital signed a 210 MW lease with a hyperscaler, adding about $5.2 billion in expected revenue and boosting confidence in its AI data center expansion. Article Title
• Positive Sentiment: The new deal lifted Applied Digital’s contracted revenue backlog to about $36 billion across five campuses, reinforcing longer-term growth visibility. Article Title
• Positive Sentiment: Several analysts turned more constructive after the announcement, including price-target increases from Needham, Lake Street, and Craig Hallum, which may support sentiment further. Article Title
• Neutral Sentiment: Applied Digital also priced $1.59 billion of senior secured notes to help fund the fourth building at Polaris Forge 1, which supports expansion but adds more debt financing to watch. Article Title
• Negative Sentiment: Offsetting the upbeat deal news, Zacks Research downgraded Applied Digital from hold to strong sell, highlighting lingering caution around the stock’s valuation and execution risks. Article Title

Wall Street Analysts Forecast Growth

APLD has been the subject of a number of analyst reports. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Applied Digital in a report on Friday, April 24th. Needham & Company LLC increased their price target on shares of Applied Digital from $66.00 to $83.00 and gave the company a "buy" rating in a report on Tuesday. Citizens Jmp raised their price objective 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. Roth Mkm reissued a "buy" rating and issued a $65.00 price objective on shares of Applied Digital in a research note on Thursday, April 23rd. Finally, Compass Point reissued a "buy" rating and issued a $70.00 price objective on shares of Applied Digital in a research note on Friday, May 22nd. Three investment analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating and two have given a Sell rating to the company. According to data from MarketBeat, Applied Digital has an average rating of "Moderate Buy" and an average price target of $67.67.

Applied Digital Stock Down 7.2%

The company's 50 day moving average price is $36.85 and its two-hundred day moving average price is $32.38. The company has a quick ratio of 2.38, a current ratio of 2.38 and a debt-to-equity ratio of 1.65. The stock has a market cap of $11.12 billion, a P/E ratio of -52.57 and a beta of 5.69.

Applied Digital (NASDAQ:APLD - Get Free Report) last issued its quarterly earnings data 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 business had revenue of $108.55 million for the quarter, compared to analysts' expectations of $78.47 million. Applied Digital had a negative net margin of 52.84% and a negative return on equity of 15.91%. The business's quarterly revenue was up 139.3% compared to the same quarter last year. During the same period in the previous year, the business earned ($0.08) earnings per share. As a group, research analysts expect that Applied Digital Corporation will post -0.68 earnings per share for the current year.

Insider Activity at Applied Digital

In related news, Director Richard N. Nottenburg sold 12,500 shares of Applied Digital stock in a transaction that occurred on Thursday, April 30th. The shares were sold at an average price of $34.59, for a total transaction of $432,375.00. Following the transaction, the director directly owned 208,378 shares of the company's stock, valued at $7,207,795.02. This trade represents a 5.66% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this link. Also, Director Douglas S. Miller sold 10,000 shares of Applied Digital stock in a transaction on Monday, April 27th. The stock was sold at an average price of $34.98, for a total transaction of $349,800.00. Following the completion of the transaction, the director directly owned 184,859 shares in the company, valued at $6,466,367.82. This represents a 5.13% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders have sold 35,000 shares of company stock worth $1,182,175. 9.50% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Digital

Several institutional investors and hedge funds have recently bought and sold shares of the company. Teachers Retirement System of The State of Kentucky purchased a new stake in shares of Applied Digital during the third quarter valued at $994,000. MRA Advisory Group purchased a new stake in shares of Applied Digital during the third quarter valued at $978,000. Vanguard Group Inc. grew its holdings in shares of Applied Digital by 23.2% during the third quarter. Vanguard Group Inc. now owns 17,722,174 shares of the company's stock valued at $406,547,000 after buying an additional 3,339,062 shares during the last quarter. Cannon Capital Management Inc. purchased a new stake in shares of Applied Digital during the fourth quarter valued at $3,635,000. Finally, Mandatum Life Insurance Co Ltd purchased a new stake in shares of Applied Digital during the third quarter valued at $924,000. 65.67% of the stock is owned by hedge funds and other institutional investors.

About Applied Digital

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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