Applied Digital (NASDAQ:APLD) Hits New 12-Month Low - What's Next?

Key Points

• Applied Digital shares fell to a new 52-week low of $18.70, pressured by a broader AI-stock selloff, higher bond yields and concerns about debt-financed expansion.
• The company reported sharply higher revenue of $300.39 million, up 367.8% year over year, and beat quarterly EPS expectations; however, it remains unprofitable, with a negative net margin and return on equity.
• Investors are focused on whether Applied Digital can secure affordable financing and turn new data-center capacity into profits. Analyst sentiment remains broadly positive, with a “Moderate Buy” consensus and an average price target of $62.25, despite some recent estimate cuts and a “strong sell” downgrade.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report) hit a new 52-week low on Thursday. The company traded as low as $18.70 and last traded at $18.6320, with a volume of 6,138,776 shares. The stock had previously closed at $20.33.

More Applied Digital News

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

• Positive Sentiment: Applied Digital’s fiscal Q1 2027 revenue surged, highlighting strong demand for its data-center capacity and supporting the company’s long-term growth opportunity. Applied Digital Fiscal Q1 2027 Revenue Surges
• Neutral Sentiment: The company’s opportunity extends beyond its reported revenue growth, but rent remains a relatively small portion of total revenue, leaving investors focused on how quickly new capacity can become profitable. Applied Digital Faces a Bigger Opportunity Than Revenue Growth
• Negative Sentiment: Financing costs are drawing renewed scrutiny across AI data-center developers. Applied Digital borrows heavily to build facilities before receiving rental income, so higher bond yields and more expensive capital could pressure cash flow, future expansion and valuation. Data Center Stocks Tumble as Financing Costs Draw Scrutiny
• Negative Sentiment: Investors are questioning whether lenders will continue funding the company’s construction pipeline amid a challenging bond market. Concerns intensified after management reported a wider loss while investing in new facilities. Could Applied Digital Survive Its Lenders Pulling Back?
• Negative Sentiment: An analyst reduced the company’s fiscal Q2 earnings estimate, adding to concerns about near-term profitability. Applied Digital’s shares also reached a fresh one-year low, reflecting deteriorating investor sentiment. Q2 EPS Estimate for Applied Digital Reduced
• Negative Sentiment: A broader selloff in AI stocks, fueled by higher inflation and rising Treasury yields, has further pressured companies dependent on debt financing, including Applied Digital. Stocks Fall as Inflation Pushes Bond Yields Higher

Wall Street Analyst Weigh In

APLD has been the subject of a number of research analyst reports. Rothschild & Co Redburn set a $22.00 price objective on shares of Applied Digital and gave the stock a "neutral" rating in a report on Monday, September 21st. Northland Securities set a $82.00 price objective on Applied Digital and gave the company an "outperform" rating in a research note on Wednesday, June 17th. B. Riley Financial reissued a "buy" rating and set a $75.00 price objective (up from $66.00) on shares of Applied Digital in a report on Monday, August 3rd. Wells Fargo & Company reissued an "overweight" rating and issued a $55.00 target price (up from $50.00) on shares of Applied Digital in a research report on Thursday, October 8th. Finally, Zacks Research downgraded Applied Digital from a "hold" rating to a "strong sell" rating in a research report on Wednesday, August 26th. Three analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, two have given a Hold rating and two have given a Sell rating to the company's stock. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average target price of $62.25.

Applied Digital Stock Performance

The company has a debt-to-equity ratio of 3.90, a current ratio of 2.56 and a quick ratio of 2.56. The firm has a market capitalization of $5.85 billion, a PE ratio of -11.65 and a beta of 5.99. The company's fifty day simple moving average is $26.51 and its 200 day simple moving average is $32.40.

Applied Digital (NASDAQ:APLD - Get Free Report) last posted its earnings results on Wednesday, October 7th. The company reported ($0.01) earnings per share for the quarter, topping the consensus estimate of ($0.30) by $0.29. Applied Digital had a negative net margin of 51.28% and a negative return on equity of 27.21%. The firm had revenue of $300.39 million during the quarter, compared to the consensus estimate of $116.29 million. During the same quarter last year, the company earned ($0.03) earnings per share. The company's revenue was up 367.8% on a year-over-year basis. As a group, equities research analysts expect that Applied Digital Corporation will post -1.93 EPS for the current fiscal year.

Insiders Place Their Bets

In related news, Director Richard Nottenburg sold 75,000 shares of Applied Digital stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $31.15, for a total value of $2,336,250.00. Following the completion of the transaction, the director directly owned 133,378 shares in the company, valued at approximately $4,154,724.70. The trade was a 35.99% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Corporate insiders own 9.50% of the company's stock.

Institutional Investors Weigh In On Applied Digital

Several institutional investors have recently made changes to their positions in the stock. Osbon Capital Management LLC purchased a new stake in shares of Applied Digital in the fourth quarter worth $28,000. Bartlett & CO. Wealth Management LLC boosted its stake in Applied Digital by 244.3% during the first quarter. Bartlett & CO. Wealth Management LLC now owns 1,205 shares of the company's stock valued at $29,000 after buying an additional 855 shares during the period. FNY Investment Advisers LLC bought a new stake in Applied Digital during the second quarter valued at $37,000. Global Assets Advisory LLC purchased a new position in Applied Digital during the first quarter worth about $53,000. Finally, CoreCap Advisors LLC grew its position in Applied Digital by 246.6% during the third quarter. CoreCap Advisors LLC now owns 2,194 shares of the company's stock worth $53,000 after buying an additional 1,561 shares in the last quarter. Hedge funds and other institutional investors own 65.67% of the company's stock.

About Applied Digital

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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