Applied Digital (NASDAQ:APLD) Stock Price Down 3.5% - Time to Sell?

Key Points

• Applied Digital shares fell 3.5% to $22.44 on heavy trading volume, with 27.8 million shares changing hands.
• The company reported sharply higher revenue and about $36 billion in contracted revenue, while planning to add more than 600 megawatts of capacity over the next year.
• Investors remain concerned about a roughly $237 million GAAP net loss, heavy debt, construction-financing needs and reduced 2027 EPS forecasts, despite analysts’ overall “Moderate Buy” consensus and $62.25 average price target.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s share price fell 3.5% on Tuesday. The company traded as low as $21.44 and last traded at $22.44. 27,793,206 shares changed hands during mid-day trading, an increase of 22% from the average session volume of 22,874,234 shares. The stock had previously closed at $23.25.

Key Headlines Impacting Applied Digital

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

• Positive Sentiment: Applied Digital reported fiscal first-quarter 2027 revenue of approximately $341.9 million, up 322% year over year, and has about $36 billion in contracted revenue. The company also plans to bring more than 600 megawatts of capacity online over the next 12 months, supporting its long-term growth story. Applied Digital Ends the Quarter With $36 Billion in Contracted Revenue as AI Moat Widens
• Positive Sentiment: Northland Securities maintained an “Outperform” rating and an $82 price target, indicating substantial potential upside if Applied Digital can execute its data-center expansion and convert contracted demand into operating cash flow. Applied Digital analyst coverage
• Neutral Sentiment: The company’s Finland expansion and planned capacity growth are attracting attention, but investors remain focused on how the buildout will be funded before tenants begin generating rent. Applied Digital Wants to Add 600 Megawatts in a Year. Can It Pay for It?
• Negative Sentiment: Despite strong revenue growth, Applied Digital posted a much wider GAAP net loss of roughly $237.1 million. Heavy debt, a debt-to-equity ratio near 3.9 and the need for significant construction spending are raising concerns about dilution, financing risk and the timing of profitability. What Could Derail Applied Digital Stock?
• Negative Sentiment: Northland sharply reduced its 2027 EPS forecasts, including lowering full-year expectations from a $0.44 loss to a $1.50 loss per share. The revisions reinforce concerns that costs and investment spending will outpace near-term earnings, contributing to the stock’s decline. Applied Digital earnings estimates

Wall Street Analysts Forecast Growth

APLD has been the topic of several research analyst reports. UBS Group reiterated a "buy" rating on shares of Applied Digital in a research report on Thursday, October 8th. Wall Street Zen lowered Applied Digital from a "sell" rating to a "strong sell" rating in a report on Sunday, August 30th. Rothschild & Co Redburn set a $22.00 price objective on Applied Digital and gave the company a "neutral" rating in a report on Monday, September 21st. Northland Securities set a $82.00 target price on shares of Applied Digital and gave the company an "outperform" rating in a research report on Wednesday, June 17th. Finally, Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Applied Digital in a research report on Tuesday, July 21st. Three analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating, two have given a Hold rating and two have given a Sell rating to the company's stock. According to MarketBeat, Applied Digital currently has a consensus rating of "Moderate Buy" and an average price target of $62.25.

Applied Digital Stock Performance

The company has a market capitalization of $6.79 billion, a price-to-earnings ratio of -13.68 and a beta of 5.99. 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 stock has a 50 day simple moving average of $26.87 and a two-hundred day simple moving average of $32.48.

Applied Digital (NASDAQ:APLD - Get Free Report) last released its quarterly earnings data on Wednesday, October 7th. The company reported ($0.01) earnings per share (EPS) for the quarter, topping the consensus estimate of ($0.30) by $0.29. Applied Digital had a negative return on equity of 27.21% and a negative net margin of 51.28%. The business had revenue of $300.39 million during the quarter, compared to analysts' expectations of $116.29 million. During the same period in the prior year, the firm posted ($0.03) EPS. The business's quarterly revenue was up 367.8% compared to the same quarter last year. As a group, analysts anticipate that Applied Digital Corporation will post -1.09 earnings per share for the current year.

Insiders Place Their Bets

In related news, Director Richard Nottenburg sold 75,000 shares of the company's stock in a transaction that occurred on Tuesday, August 4th. The stock was 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 of the company's stock, valued at $4,154,724.70. This represents a 35.99% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. 9.50% of the stock is currently owned by insiders.

Institutional Trading of Applied Digital

Institutional investors have recently modified their holdings of the stock. Whitaker Myers Wealth Managers LTD. purchased a new position in shares of Applied Digital in the 2nd quarter valued at $1,841,000. Cambridge Investment Research Advisors Inc. lifted its position in 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 acquiring an additional 41,562 shares during the last quarter. Dimensional Fund Advisors LP acquired a new position in Applied Digital in the first quarter valued at $1,970,000. Situational Awareness LP boosted its stake in Applied Digital by 14.1% in the second quarter. Situational Awareness LP now owns 15,384,616 shares of the company's stock valued at $574,000 after acquiring an additional 1,906,178 shares in the last quarter. Finally, TFR Capital LLC. grew its holdings in shares of 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 during 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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.