Stock Traders Purchase High Volume of Call Options on Applied Digital (NASDAQ:APLD)

Key Points

• Options activity surged: Traders purchased 136,979 Applied Digital call options, about 83% above the typical daily volume of 74,667, signaling heightened interest in the stock.
• Shares fell sharply: APLD traded down $1.53 to $23.81 amid unusually high share volume. The company recently reported a wider-than-expected quarterly loss of $0.39 per share, despite revenue rising 406.3% year over year to $240.35 million.
• Analyst sentiment remains broadly positive but risks persist: The stock carries a “Moderate Buy” consensus rating and an average price target of $60.88, while Applied Digital faces significant debt, ongoing losses and execution challenges as it expands AI data-center capacity.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report) was the target of unusually large options trading on Wednesday. Stock traders bought 136,979 call options on the stock. This represents an increase of approximately 83% compared to the typical daily volume of 74,667 call options.

Applied Digital Stock Performance

Shares of NASDAQ APLD traded down $1.53 during midday trading on Wednesday, hitting $23.81. The company's stock had a trading volume of 38,782,382 shares, compared to its average volume of 22,611,773. The company has a debt-to-equity ratio of 2.88, a quick ratio of 4.01 and a current ratio of 4.01. Applied Digital has a 1-year low of $19.00 and a 1-year high of $50.72. The firm's fifty day moving average price is $27.14 and its 200-day moving average price is $32.56. The firm has a market cap of $6.94 billion, a P/E ratio of -26.75 and a beta of 5.99.

Applied Digital (NASDAQ:APLD - Get Free Report) last issued its earnings results on Monday, July 27th. The company reported ($0.39) earnings per share (EPS) for the quarter, missing analysts' consensus estimates 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 return on equity of 16.42% and a negative net margin of 37.78%.The business's revenue was up 406.3% on a year-over-year basis. During the same period in the prior year, the business earned ($0.24) EPS. On average, sell-side analysts forecast that Applied Digital will post -1.09 EPS for the current fiscal year.

Insiders Place Their Bets

In other Applied Digital news, Director Richard Nottenburg sold 75,000 shares of Applied Digital stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $31.15, for a total transaction of $2,336,250.00. Following the sale, the director directly owned 133,378 shares in the company, valued at $4,154,724.70. The trade was a 35.99% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. 9.50% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Applied Digital

Large investors have recently added to or reduced their stakes in the stock. Whitaker Myers Wealth Managers LTD. acquired a new stake in Applied Digital during the second quarter valued at approximately $1,841,000. Cambridge Investment Research Advisors Inc. increased its holdings in shares of Applied Digital by 39.6% in the second quarter. Cambridge Investment Research Advisors Inc. now owns 146,633 shares of the company's stock valued at $5,469,000 after buying an additional 41,562 shares in the last quarter. Dimensional Fund Advisors LP acquired a new stake in shares of Applied Digital during the 1st quarter valued at $1,970,000. Situational Awareness LP boosted its stake in shares of Applied Digital by 14.1% during the 2nd quarter. Situational Awareness LP now owns 15,384,616 shares of the company's stock worth $574,000 after acquiring an additional 1,906,178 shares in the last quarter. Finally, TFR Capital LLC. boosted its stake in shares of Applied Digital by 425.3% during the 1st quarter. TFR Capital LLC. now owns 372,960 shares of the company's stock worth $9,497,000 after acquiring an additional 301,954 shares in the last quarter. 65.67% of the stock is owned by institutional investors and hedge funds.

Key Applied Digital News

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

• Positive Sentiment: Applied Digital secured access to up to 1 gigawatt of potential power capacity in Finland for a large-scale AI campus. The agreement marks the company’s first development opportunity outside the United States and could expand its addressable market, although talks with prospective hyperscale customers are still underway. Applied Digital Secures Up to 1 GW of Potential Power Capacity in Finland
• Positive Sentiment: Wells Fargo maintained an Overweight view on AI and high-performance-computing infrastructure operators, naming Applied Digital among its top picks alongside TeraWulf and Hut 8. The bank expects the group to pursue more than $20 billion in debt financing, potentially supporting capacity growth if tenant credit and delivery schedules remain sound. Wells Fargo keeps AI/HPC operators Overweight
• Neutral Sentiment: The earnings report is the immediate catalyst. Analysts expect sharply higher revenue, building on the company’s prior 406% year-over-year revenue growth, but investors are focused on whether new AI data-center capacity is translating into sustainable margins and contracted revenue. Applied Digital Reports Today: What to Know
• Negative Sentiment: Shares are selling off despite the Finland announcement, tracking weakness across AI data-center developers. This indicates that investors may be prioritizing earnings expectations, financing needs and execution concerns over the longer-term expansion opportunity. Applied Digital Falls Ahead of Earnings
• Negative Sentiment: Investors face substantial balance-sheet and profitability risks. Rising debt, heavy AI infrastructure spending and a history of earnings losses could pressure results, while roughly 21% of the public float is sold short, increasing volatility around the earnings release. Applied Digital to Post Q1 Earnings

Analysts Set New Price Targets

APLD has been the topic of several recent analyst reports. B. Riley Financial reaffirmed a "buy" rating and issued a $75.00 price target (up from $66.00) on shares of Applied Digital in a report on Monday, August 3rd. Citigroup reissued a "market outperform" rating on shares of Applied Digital in a research report on Monday, August 3rd. Craig Hallum upped their target price on shares of Applied Digital from $75.00 to $79.00 and gave the company a "buy" rating in a research note on Tuesday, June 9th. Zacks Research downgraded Applied Digital from a "hold" rating to a "strong sell" rating in a research note on Wednesday, August 26th. Finally, Lake Street Capital upped their price objective on Applied Digital from $70.00 to $90.00 and gave the company a "buy" rating in a research note on Tuesday, June 9th. Three equities research analysts have rated the stock with a Strong Buy rating, thirteen have given a Buy rating, two have issued a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat, Applied Digital presently has a consensus rating of "Moderate Buy" and an average target price of $60.88.

Applied Digital Company Profile

Applied Digital Corporation NASDAQ: APLD develops and operates digital infrastructure designed to support high-performance computing, artificial intelligence and other data-intensive applications. The company provides data-center capacity and related services to customers that require substantial computing power and electricity.

The company's business has included hosting infrastructure for cryptocurrency-mining operations and, increasingly, developing facilities for artificial intelligence and high-performance computing workloads.

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