Applied Digital (NASDAQ:APLD) Shares Down 9% After Analyst Downgrade

Key Points

• Applied Digital shares fell 9% to about $16.22 after B. Riley cut its price target from $75 to $51, although it maintained a buy rating.
• Analyst sentiment remains mixed: the stock has an overall “Moderate Buy” rating and an average target of $57.75, but several firms have issued sell or strong-sell recommendations.
• President Jason Gechen Zhang bought 300,000 shares for approximately $5.7 million, while the company continues to face significant financing and leverage concerns as it expands its AI data-center capacity.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report) shares were down 9% during mid-day trading on Monday after B. Riley Financial lowered their price target on the stock from $75.00 to $51.00. B. Riley Financial currently has a buy rating on the stock. Applied Digital traded as low as $16.16 and last traded at $16.22. 23,197,177 shares were traded during mid-day trading, an increase of 0% from the average daily volume of 23,136,596 shares. The stock had previously closed at $17.82.

A number of other equities research analysts have also issued reports on APLD. Wall Street Zen lowered shares of Applied Digital from a "sell" rating to a "strong sell" rating in a report on Sunday, August 30th. Weiss Ratings restated a "sell (d-)" rating on shares of Applied Digital in a research report on Monday, October 19th. Roth Capital set a $35.00 target price on shares of Applied Digital and gave the stock a "buy" rating in a research note on Wednesday, October 21st. UBS Group reiterated a "buy" rating on shares of Applied Digital in a report on Thursday, October 8th. Finally, Zacks Research cut shares of Applied Digital from a "hold" rating to a "strong sell" rating in a research note on Wednesday, August 26th. Three research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, two have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, Applied Digital presently has an average rating of "Moderate Buy" and an average target price of $57.75.

Insider Transactions at Applied Digital

In related news, President Jason Gechen Zhang acquired 300,000 shares of Applied Digital stock in a transaction that occurred on Friday, October 16th. The shares were purchased at an average cost of $18.86 per share, for a total transaction of $5,658,000.00. Following the acquisition, the president owned 2,839,227 shares in the company, valued at approximately $53,547,821.22. This represents a 11.81% increase in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this hyperlink. Also, Director Richard N. Nottenburg sold 75,000 shares of the company's stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $31.15, for a total transaction of $2,336,250.00. Following the completion of the transaction, 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 SEC filing for this sale provides additional information. Company insiders own 9.50% of the company's stock.

Applied Digital News Summary

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

• Positive Sentiment: Applied Digital is highlighted as a potential long-term beneficiary of the AI infrastructure boom, with rapid expansion aimed at supporting high-performance computing and large AI Factory campuses. The comparison with IREN suggests APLD may offer significant growth if it successfully converts its infrastructure buildout into contracted AI revenue. Applied Digital vs. IREN: Which Technology Stock Is a Better Buy for 2027?
• Positive Sentiment: Applied Digital was included among stocks trading near long-term lows that could rebound as AI monetization, backlog growth and cash-flow prospects improve. This supports the bullish case for investors willing to tolerate elevated execution and financing risk. 5 Stocks to Buy in November: Bargains Worth Giving Thanks For
• Neutral Sentiment: Coverage of the broader data-center sector, including Core Scientific’s shift from Bitcoin mining to AI colocation, shows that investors remain interested in the opportunity but are increasingly focused on debt and funding requirements across the industry. Core Scientific vs. CIFR and WULF
• Negative Sentiment: CEO comments that approximately 800 megawatts of planned capacity still needs financing revived concerns about how Applied Digital will fund its AI data-center expansion. The uncertainty is especially significant given the capital-intensive nature of the projects and the company’s high leverage. Applied Digital Slumps as CEO Says 800 MW Still Needs Financing
• Negative Sentiment: Recent analyst actions added pressure: B. Riley Financial cut its price target, while another report cited an analyst downgrade. Separate commentary also pointed to large lease obligations and a challenging capital structure, reinforcing concerns about dilution, borrowing costs and execution risk. Applied Digital Stock Gets Price Target Cut

Institutional Investors Weigh In On Applied Digital

Institutional investors and hedge funds have recently made changes to their positions in the stock. Equitec Proprietary Markets LLC purchased a new position in shares of Applied Digital during the 2nd quarter worth approximately $312,349,000. Situational Awareness LP raised its position in Applied Digital by 18.9% in the first quarter. Situational Awareness LP now owns 13,478,438 shares of the company's stock valued at $319,978,000 after purchasing an additional 2,139,378 shares during the period. Hsbc Holdings PLC purchased a new stake in Applied Digital in the fourth quarter valued at approximately $29,510,000. Janus Henderson Group PLC raised its position in Applied Digital by 318.5% in the first quarter. Janus Henderson Group PLC now owns 785,152 shares of the company's stock valued at $18,638,000 after purchasing an additional 597,548 shares during the period. Finally, TFR Capital LLC. lifted its stake in Applied Digital by 425.3% during the first quarter. TFR Capital LLC. now owns 372,960 shares of the company's stock worth $9,497,000 after purchasing an additional 301,954 shares in the last quarter. 65.67% of the stock is owned by hedge funds and other institutional investors.

Applied Digital Stock Down 9.0%

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 business has a 50 day simple moving average of $24.06 and a 200 day simple moving average of $31.35. The company has a market capitalization of $4.90 billion, a price-to-earnings ratio of -9.89 and a beta of 5.59.

Applied Digital (NASDAQ:APLD - Get Free Report) last issued its quarterly earnings data on Wednesday, October 7th. The company reported ($0.01) earnings per share for the quarter, beating analysts' consensus estimates of ($0.30) by $0.29. The business had revenue of $300.39 million during the quarter, compared to analysts' expectations of $116.29 million. Applied Digital had a negative return on equity of 27.21% and a negative net margin of 51.28%. The company's revenue was up 367.8% on a year-over-year basis. During the same period in the previous year, the firm posted ($0.03) earnings per share. As a group, equities analysts predict that Applied Digital Corporation will post -2.17 earnings per share for the current fiscal year.

Applied Digital Company Profile

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

Its business includes high-performance computing data centers and cloud services intended to support artificial intelligence, machine learning, cryptocurrency mining and other compute-intensive workloads.

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