Applied Digital (NASDAQ:APLD) Stock Price Down 4.1% - Here's What Happened

Key Points

• Applied Digital shares fell 4.1% to $24.37 in mid-day trading, with about 15.3 million shares changing hands. The stock remains below its 50-day and 200-day moving averages.
• The company’s AI and high-performance-computing strategy and approximately $36 billion lease book attract bullish analysts, but investors remain divided over its negative earnings, high leverage, funding needs and execution risks. Analysts’ price targets range from $37.50 to $75, with an average target of $60.88.
• Key risks include customer concentration—about 56% of contracted revenue is reportedly tied to one customer—along with insider selling, potential share dilution and a Zacks “Strong Sell” ranking. Investors will look to the October 7 fiscal first-quarter 2027 report for updates on leasing, construction, capital requirements and management’s outlook.

Shares of Applied Digital Corporation (NASDAQ:APLD - Get Free Report) traded down 4.1% during mid-day trading on Wednesday. The stock traded as low as $24.36 and last traded at $24.37. Approximately 15,305,684 shares traded hands during mid-day trading, a decline of 32% from the average daily volume of 22,575,086 shares. The stock had previously closed at $25.41.

More Applied Digital News

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

• Positive Sentiment: Applied Digital’s approximately $36 billion lease book and transition toward high-performance computing and AI data centers provide substantial long-term growth potential. Several analysts maintain bullish views, with recently cited price targets ranging from $60 to $90. Applied Digital Could Be 64% Undervalued As Analysts Split Ahead Of Earnings
• Positive Sentiment: Institutional activity was mixed but included sizable purchases by Two Sigma, Equitec, D. E. Shaw, Oasis Management and Norges Bank, suggesting some professional investors continue to see upside in the AI-infrastructure strategy.
• Neutral Sentiment: Applied Digital is scheduled to report fiscal first-quarter 2027 results and hold its conference call on October 7. Investors are focused on leasing progress, construction timelines, capital requirements and management’s outlook. Applied Digital Sets Fiscal First Quarter 2027 Conference Call
• Neutral Sentiment: Analyst opinion is sharply divided: some view the company as potentially undervalued based on future contracts, while others argue that current sales and earnings do not yet justify the valuation. Higher interest rates could further raise the cost of funding its capital-intensive expansion. Applied Digital Balancing AI Data Center Ambitions With Funding and Execution Discipline
• Negative Sentiment: Valuation-focused coverage describes APLD as potentially overvalued despite the lease backlog, citing negative earnings, substantial leverage and the lengthy period required to convert contracts into profitable operating results. Applied Digital Stock Looks Overvalued Despite $36B Lease Book
• Negative Sentiment: Approximately 56% of contracted revenue is reportedly tied to one customer, creating concentration risk if that customer delays, renegotiates or cancels commitments. Applied Digital Has 56% of Contracts With One Customer
• Negative Sentiment: Zacks added APLD to its Rank #5 “Strong Sell” list, while recent insider activity showed sales and no purchases. A previously filed resale registration covering up to 53.1 million shares also continues to create potential supply and dilution overhang concerns.

Analyst Ratings Changes

A number of brokerages have weighed in on APLD. Wall Street Zen downgraded Applied Digital from a "sell" rating to a "strong sell" rating in a report on Sunday, August 30th. Morgan Stanley upped their target price on Applied Digital from $36.50 to $37.50 and gave the company an "equal weight" rating in a research report on Thursday, August 6th. Wells Fargo & Company began coverage on Applied Digital in a research note on Thursday, September 17th. They set an "overweight" rating and a $50.00 target price for the company. Weiss Ratings reissued a "sell (d-)" rating on shares of Applied Digital in a research note on Tuesday, July 21st. Finally, B. Riley Financial reaffirmed a "buy" rating and set a $75.00 price objective (up from $66.00) on shares of Applied Digital in a research report on Monday, August 3rd. Three research analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating, two have issued a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and an average target price of $60.88.

Applied Digital Stock Down 4.1%

The stock has a market cap of $7.10 billion, a price-to-earnings ratio of -27.38 and a beta of 5.72. The stock has a 50 day simple moving average of $27.47 and a 200 day simple moving average of $32.65. The company has a quick ratio of 4.01, a current ratio of 4.01 and a debt-to-equity ratio of 2.88.

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 firm 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%.Applied Digital's revenue for the quarter was up 406.3% on a year-over-year basis. During the same quarter in the prior year, the business earned ($0.24) earnings per share. As a group, analysts expect that Applied Digital Corporation will post -1.09 earnings per share for the current fiscal year.

Insider Activity at Applied Digital

In related news, Director Richard Nottenburg sold 75,000 shares of the firm'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 transaction, the director directly owned 133,378 shares of the company's stock, valued at $4,154,724.70. This trade represents a 35.99% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 9.50% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Digital

Hedge funds have recently modified their holdings of the company. GAMMA Investing LLC boosted its stake in shares of Applied Digital by 28.5% in the 2nd quarter. GAMMA Investing LLC now owns 2,092 shares of the company's stock worth $78,000 after buying an additional 464 shares during the last quarter. Krilogy Financial LLC lifted its holdings in Applied Digital by 4.1% during the second quarter. Krilogy Financial LLC now owns 14,243 shares of the company's stock worth $531,000 after acquiring an additional 561 shares during the period. Vermillion Wealth Management Inc. boosted its position in Applied Digital by 29.4% in the first quarter. Vermillion Wealth Management Inc. now owns 2,563 shares of the company's stock worth $61,000 after purchasing an additional 583 shares during the last quarter. Envestnet Asset Management Inc. boosted its position in Applied Digital by 4.7% in the second quarter. Envestnet Asset Management Inc. now owns 13,333 shares of the company's stock worth $497,000 after purchasing an additional 596 shares during the last quarter. Finally, Handelsbanken Fonder AB grew its stake in Applied Digital by 1.0% in the 2nd quarter. Handelsbanken Fonder AB now owns 71,600 shares of the company's stock valued at $2,671,000 after purchasing an additional 700 shares during the period. Institutional investors own 65.67% of the company's stock.

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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