Applied Digital (NASDAQ:APLD) Trading Up 10.5% - Still a Buy?

Key Points

• Applied Digital completed the separation of its cloud unit into independent public company ChronoScale, retaining roughly 97% ownership and investing $15.75M, a strategic simplification meant to focus Applied on AI/data‑center hosting while preserving upside in the spin‑out.
• The stock jumped about 10.5% (to ~$44.08) on higher volume after the company secured a $300M financing and announced a new 15‑year, $7.5B lease that lifts total contracted revenue above $23B, supporting near‑ and long‑term expansion plans.
• Fundamentals and risks remain mixed: revenue grew ~139% year‑over‑year but the company missed on EPS and has negative margins/ROE, analysts rate the stock a "Moderate Buy" with an average target of $44.33, and insiders have recently sold shares — highlighting execution and concentration risks.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report) was up 10.5% during trading on Wednesday . The company traded as high as $44.25 and last traded at $44.0830. Approximately 32,419,785 shares traded hands during mid-day trading, an increase of 21% from the average daily volume of 26,848,459 shares. The stock had previously closed at $39.88.

Applied Digital News Summary

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

• Positive Sentiment: Applied Digital completed the separation of its cloud business into an independent public company, ChronoScale (ticker CHRN), leaving Applied Digital focused on AI data‑center hosting and retaining a significant ownership stake — a strategic simplification investors rewarded. Applied Digital Completes Separation of Cloud Business
• Positive Sentiment: ChronoScale began trading as an independent company after the deal, and Applied Digital will retain roughly 97% ownership while investing $15.75M at closing — providing potential upside from two distinct public vehicles. Applied Digital Completes Separation of Cloud Business (Yahoo)
• Positive Sentiment: Investors cheered Applied Digital’s successful $300M financing to support data‑center expansion, improving liquidity to fund growth and likely easing near‑term capital concerns. Applied Digital Raises $300M for Expansion
• Positive Sentiment: Applied Digital announced a new 15‑year, $7.5B lease with an investment‑grade hyperscaler at its Delta Forge 1 campus, lifting total contracted lease revenue above $23B — materially boosting long‑term revenue visibility. Applied Digital’s Multi Billion AI Lease
• Neutral Sentiment: ChronoScale appointed Cenly Chen as CEO to lead its AI compute growth — a governance/mgmt update that supports the spin‑out’s operational credibility but does not directly change Applied Digital’s core hosting business. ChronoScale Appoints Cenly Chen as CEO
• Neutral Sentiment: Market commentary and speculative pieces (e.g., “Could APLD reach $180…”) are amplifying investor interest and momentum but are largely forward‑looking and speculative; they can drive short‑term volatility rather than new fundamentals. Could APLD Reach $180 on the AI Data Center Surge?
• Negative Sentiment: Despite the big lease and spin‑out, analysts caution the moves increase execution and concentration risks (long build/fulfillment timelines, counterparty exposure, and the complexity of owning a majority stake in the spun company), which could create downside if growth or funding stalls. Applied Digital Spins Off ChronoScale

Analyst Ratings Changes

Several research analysts have issued reports on the company. Roth Mkm reiterated a "buy" rating and set a $65.00 price objective on shares of Applied Digital in a research note on Thursday, April 23rd. B. Riley Financial increased their price objective on Applied Digital to $53.00 and gave the stock a "buy" rating in a research note on Friday, January 9th. Texas Capital upgraded Applied Digital to a "strong-buy" rating in a research note on Tuesday, January 20th. Freedom Capital upgraded Applied Digital to a "strong-buy" rating in a research note on Tuesday, January 6th. Finally, Citizens Jmp reiterated a "market outperform" rating and set a $40.00 price objective on shares of Applied Digital in a research note on Thursday, April 9th. Two analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating and two have issued a Sell rating to the stock. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average price target of $44.33.

Applied Digital Price Performance

The firm has a 50 day simple moving average of $28.78 and a 200-day simple moving average of $30.08. The company has a debt-to-equity ratio of 1.65, a quick ratio of 2.38 and a current ratio of 2.38.

Applied Digital (NASDAQ:APLD - Get Free Report) last announced its earnings results on Wednesday, April 8th. The company reported ($0.36) 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 the consensus estimate of $78.47 million. Applied Digital had a negative return on equity of 15.91% and a negative net margin of 52.84%.Applied Digital's revenue for the quarter was up 139.3% on a year-over-year basis. During the same quarter in the previous year, the company posted ($0.08) EPS. Equities analysts anticipate that Applied Digital Corporation will post -0.52 EPS for the current fiscal year.

Insider Buying and Selling at Applied Digital

In other news, Director Douglas S. Miller sold 10,000 shares of the 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 sale, the director owned 184,859 shares in the company, valued at approximately $6,466,367.82. This represents a 5.13% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, Director Richard N. Nottenburg sold 12,500 shares of the stock in a transaction on Thursday, April 30th. The stock was sold at an average price of $34.59, for a total value of $432,375.00. Following the sale, the director owned 208,378 shares in the company, valued at $7,207,795.02. The trade was a 5.66% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 35,000 shares of company stock worth $1,182,175 in the last 90 days. Company insiders own 9.50% of the company's stock.

Institutional Trading of Applied Digital

Several large investors have recently made changes to their positions in the business. Teachers Retirement System of The State of Kentucky bought a new position in shares of Applied Digital in the 3rd quarter valued at about $994,000. Federated Hermes Inc. acquired a new position in Applied Digital in the third quarter valued at approximately $3,204,000. AlphaQuest LLC acquired a new position in Applied Digital in the third quarter valued at approximately $1,369,000. MRA Advisory Group bought a new position in Applied Digital in the third quarter valued at approximately $978,000. Finally, Vanguard Group Inc. boosted its stake in Applied Digital by 23.2% in the third quarter. Vanguard Group Inc. now owns 17,722,174 shares of the company's stock valued at $406,547,000 after acquiring an additional 3,339,062 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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