Applied Digital (NASDAQ:APLD) Stock Price Down 7.7% - Should You Sell?

Key Points

• Applied Digital shares fell 7.7% to $25.34 amid a broader selloff in capital-intensive AI and data-center stocks, intensified by a Zacks downgrade to “Strong Sell.”
• The company’s AI data-center pipeline and long-term contracts support strong growth prospects: quarterly revenue surged 406.3% year over year to $240.35 million, although it missed earnings expectations and remains unprofitable.
• Analyst sentiment is mixed but leans bullish, with a consensus “Moderate Buy” rating and average price target of $68.15; however, the stock’s demanding valuation, high debt-to-equity ratio and execution risks leave limited room for disappointment.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s stock price fell 7.7% on Friday . The company traded as low as $25.09 and last traded at $25.34. 19,604,923 shares changed hands during trading, a decline of 17% from the average session volume of 23,514,982 shares. The stock had previously closed at $27.44.

Applied Digital News Summary

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

• Positive Sentiment: Applied Digital’s long-term AI data-center lease pipeline and recently announced deals could support substantial revenue growth over the next several years. One bullish analysis projects significant upside if the company converts its contracted capacity into recurring lease revenue. Prediction: Applied Digital Stock Will Jump 156% in 3 Years
• Positive Sentiment: The company’s expanding AI infrastructure business and long-term contracts remain a fundamental source of investor optimism, even as the stock has recently diverged from its operational momentum. Applied Digital Stock Is Down, But Its AI Data Center Business Is Powering Up
• Neutral Sentiment: Applied Digital has produced exceptionally strong three-year returns, but its valuation remains demanding relative to sales. That suggests the market is already pricing in considerable success from its AI data-center expansion, leaving less room for execution disappointments. Applied Digital Stock Looks Strong on Returns but Expensive on Sales
• Negative Sentiment: A $639 million impairment charge at IREN, tied to older Bitcoin-mining equipment, triggered a broader selloff in capital-intensive AI and data-center stocks. Investors appear to be repricing transition costs across the group, despite no comparable writedown being reported for Applied Digital. Applied Digital and IREN Data Center Selloff
• Negative Sentiment: Zacks Research downgraded Applied Digital from “Hold” to “Strong Sell,” adding pressure to sentiment. The downgrade reinforces concerns about valuation, execution risk and the company’s losses, even though its revenue growth and AI pipeline remain strong.

Analyst Ratings Changes

APLD has been the topic of a number of research reports. Weiss Ratings reissued a "sell (d-)" rating on shares of Applied Digital in a research report on Tuesday, July 21st. B. Riley Financial reaffirmed a "buy" rating and issued a $75.00 target price (up from $66.00) on shares of Applied Digital in a research report on Monday, August 3rd. Lake Street Capital lifted their price target on shares of Applied Digital from $70.00 to $90.00 and gave the company a "buy" rating in a research note on Tuesday, June 9th. Citigroup reissued a "market outperform" rating on shares of Applied Digital in a research report on Monday, August 3rd. Finally, Morgan Stanley increased their price objective on shares of Applied Digital from $36.50 to $37.50 and gave the stock an "equal weight" rating in a research note on Thursday, August 6th. Three investment analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating, one has assigned a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $68.15.

Applied Digital Trading Down 7.7%

The company has a debt-to-equity ratio of 2.88, a current ratio of 4.01 and a quick ratio of 4.01. The business has a 50-day simple moving average of $31.29 and a two-hundred day simple moving average of $33.42. The stock has a market cap of $7.39 billion, a price-to-earnings ratio of -28.47 and a beta of 5.75.

Applied Digital (NASDAQ:APLD - Get Free Report) last released its quarterly earnings data 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 analyst estimates of $96.85 million. Applied Digital had a negative net margin of 37.78% and a negative return on equity of 16.42%. The business's quarterly revenue was up 406.3% on a year-over-year basis. During the same period in the previous year, the business earned ($0.24) earnings per share. Equities analysts forecast that Applied Digital Corporation will post -1.09 EPS for the current fiscal year.

Insider Buying and Selling

In other Applied Digital news, Director Richard N. Nottenburg sold 75,000 shares of the company's stock in a transaction 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 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 ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. 9.50% of the stock is currently owned by company insiders.

Institutional Trading of Applied Digital

A number of hedge funds have recently modified their holdings of APLD. Activest Wealth Management acquired a new position in Applied Digital in the 4th quarter valued at about $25,000. Ameriflex Group Inc. bought a new stake in shares of Applied Digital during the fourth quarter worth approximately $25,000. McMillan Office Inc. acquired a new position in shares of Applied Digital in the fourth quarter valued at approximately $25,000. Larson Financial Group LLC increased its stake in shares of Applied Digital by 56,450.0% during the third quarter. Larson Financial Group LLC now owns 1,131 shares of the company's stock worth $26,000 after purchasing an additional 1,129 shares during the period. Finally, Northwestern Mutual Wealth Management Co. acquired a new stake in Applied Digital during the 2nd quarter worth approximately $26,000. Institutional investors and hedge funds own 65.67% of the company's stock.

About Applied Digital

Applied Digital NASDAQ: APLD is a technology company specializing in the development and operation of large-scale digital infrastructure and sustainable Bitcoin mining solutions. Through its integrated platform, the company designs, builds and manages turnkey data center facilities while also providing comprehensive hosting services for cloud, colocation and enterprise computing needs. Applied Digital's modular approach to facility design enables rapid deployment of capacity and streamlined integration of power, cooling and network connectivity.

In addition to its data center business, Applied Digital operates a network of Bitcoin mining sites that leverage vertically integrated capabilities, including hardware procurement, mining farm engineering, energy management and real-time performance monitoring.

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.

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