Applied Digital (NASDAQ:APLD) Shares Climb 3.6% – Still a Buy?

Shares of Applied Digital Corporation (NASDAQ:APLD) were up 3.6% during mid-day trading on Tuesday. The stock traded as high as $25.67 and last traded at $25.41. Approximately 15,909,712 shares changed hands during mid-day trading, a decline of 30% from the average daily volume of 22,613,729 shares. The stock had previously closed at $24.53.

Key Headlines Impacting Applied Digital

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

• Positive Sentiment: Applied Digital is included among stocks with significant short-squeeze potential. A heavily shorted stock can rally sharply if positive catalysts, improving sentiment or stronger-than-expected results force bearish investors to cover positions. 10 Stocks With Massive Short Squeeze Potential
• Positive Sentiment: Analyst and investor attention remains focused on Applied Digital’s shift toward AI-focused data centers and high-performance computing. The company’s reported $36 billion lease book and potentially attractive project economics support the long-term growth case if management can secure funding and deliver capacity on schedule. AI Data Center Ambitions
• Neutral Sentiment: Recent coverage compares Applied Digital with other IT-services and technology companies, highlighting that its investment case depends more on future data-center expansion and financing execution than on current profitability. Q2 Rundown
• Neutral Sentiment: Applied Digital was expected to report quarterly results, making the upcoming earnings release an important catalyst. Investors will likely focus on lease progress, revenue growth, cash requirements and guidance for AI infrastructure projects. Expected Quarterly Earnings
• Negative Sentiment: Valuation-focused reports argue that Applied Digital’s share price remains difficult to justify against its current sales base, despite the large lease pipeline. The stock’s roughly 300% three-year gain has increased the risk of further multiple compression if growth expectations moderate. Valuation Concerns
• Negative Sentiment: One report says 56% of Applied Digital’s contracts are tied to a single customer, creating material concentration risk. Any delay, renegotiation or loss involving that customer could significantly affect revenue visibility and investor confidence. Customer Concentration
• Negative Sentiment: Analysts continue to flag the company’s complex capital structure and dependence on external financing. Higher interest rates could raise funding costs for capital-intensive data-center construction, while execution delays could weaken the economics of otherwise attractive projects. Project Economics and Capital Structure

Wall Street Analysts Forecast Growth

Several equities analysts have recently weighed in on APLD shares. Morgan Stanley raised 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. Lake Street Capital increased their price objective on Applied Digital from $70.00 to $90.00 and gave the company a “buy” rating in a research note on Tuesday, June 9th. Needham & Company LLC reissued a “buy” rating and issued a $83.00 price objective on shares of Applied Digital in a research note on Tuesday, July 28th. Zacks Research cut shares of Applied Digital from a “hold” rating to a “strong sell” rating in a research note on Wednesday, August 26th. Finally, Craig Hallum raised their target price on shares of Applied Digital from $75.00 to $79.00 and gave the stock a “buy” rating in a research note on Tuesday, June 9th. Three investment 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 issued a Sell rating to the stock. According to data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $60.88.

Applied Digital Price Performance

The firm has a market cap of $7.05 billion, a price-to-earnings ratio of -27.11 and a beta of 5.72. The company has a current ratio of 4.01, a quick ratio of 4.01 and a debt-to-equity ratio of 2.88. The stock’s fifty day moving average price is $27.35 and its 200-day moving average price is $32.63.

Applied Digital (NASDAQ:APLD) last issued its quarterly earnings data on Monday, July 27th. The company reported ($0.39) earnings per share for the quarter, missing the consensus estimate of ($0.09) by ($0.30). Applied Digital had a negative return on equity of 16.42% and a negative net margin of 37.78%.The business had revenue of $240.35 million during the quarter, compared to analysts’ expectations of $96.85 million. During the same quarter in the previous year, the company posted ($0.24) earnings per share. The company’s revenue was up 406.3% on a year-over-year basis. As a group, equities research analysts forecast that Applied Digital Corporation will post -1.09 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other news, Director Richard Nottenburg sold 75,000 shares of the firm’s stock in a transaction on Tuesday, August 4th. The stock was 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. This trade represents a 35.99% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Company insiders own 9.50% of the company’s stock.

Hedge Funds Weigh In On Applied Digital

Several institutional investors have recently bought and sold shares of the company. GAMMA Investing LLC increased its stake in Applied Digital by 28.5% in the 2nd quarter. GAMMA Investing LLC now owns 2,092 shares of the company’s stock valued at $78,000 after buying an additional 464 shares during the period. Krilogy Financial LLC raised 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 purchasing an additional 561 shares in the last quarter. Vermillion Wealth Management Inc. lifted 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 valued at $61,000 after purchasing an additional 583 shares during the period. Envestnet Asset Management Inc. lifted 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 valued at $497,000 after purchasing an additional 596 shares during the period. Finally, Handelsbanken Fonder AB lifted its position in Applied Digital by 1.0% in the second 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. 65.67% of the stock is owned by institutional investors and hedge funds.

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.