Applied Digital (NASDAQ:APLD) Stock Price Up 8.5% – Should You Buy?

Applied Digital Corporation (NASDAQ:APLD) traded up 8.5% during trading on Wednesday. The stock traded as high as $21.56 and last traded at $20.98. 28,822,911 shares were traded during mid-day trading, an increase of 25% from the average session volume of 23,101,943 shares. The stock had previously closed at $19.33.

Key Headlines Impacting Applied Digital

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

• Positive Sentiment: Co-founders Wes Cummins and Jason Zhang purchased approximately $6.7 million of Applied Digital shares as the stock weakened. The purchases may signal that management views the selloff as excessive and remains confident in the company’s long-term data-center opportunity. Applied Digital’s Co-Founders Loaded Up on Shares as the Stock Hit a One-Year Low
• Positive Sentiment: Applied Digital and Soluna Holdings agreed to develop a 50-megawatt, wind-powered AI and high-performance computing data center in Texas. Applied Digital will hold a 51% stake, provide financing, and control operations, potentially expanding its contracted infrastructure pipeline while securing access to renewable power. What Is Applied Digital Really Building With Its 50 MW Texas AI Site?
• Positive Sentiment: Roth Capital initiated coverage with a Buy rating and a $35 price target, implying substantial upside from recent trading levels. The bullish view follows the Texas project announcement and Applied Digital’s reported $36 billion contracted pipeline. Roth Capital Applied Digital Coverage
• Neutral Sentiment: The Texas joint venture gives Applied Digital greater control as both infrastructure owner and tenant, but it also leaves the company responsible for financing and operating the project. That structure could increase long-term earnings potential while adding near-term capital requirements.
• Negative Sentiment: Investors are increasingly concerned about the AI data-center sector’s funding needs. Reports cite a potential industry-wide funding gap of approximately $76 billion and bond yields near 15%, conditions that could make Applied Digital’s capital-intensive expansion more expensive and raise dilution or leverage risks. Short Sellers Just Made $6 Billion Betting Against AI Data Center Stocks
• Negative Sentiment: A comparison with Dell highlights Applied Digital’s higher risk profile: Dell has a $95 billion AI-server backlog and a lower valuation, while Applied Digital’s $36 billion pipeline comes with heavier financing demands and ongoing losses. This comparison may be limiting enthusiasm for APLD despite its growth prospects. DELL vs. APLD: Which AI-Infrastructure Stock Looks More Attractive?

Analysts Set New Price Targets

Several equities research analysts recently weighed in on APLD shares. Wells Fargo & Company reiterated an “overweight” rating and set a $55.00 price objective (up from $50.00) on shares of Applied Digital in a research note on Thursday, October 8th. Morgan Stanley set a $41.00 target price on Applied Digital and gave the company an “equal weight” rating in a research note on Friday, October 9th. Roth Capital set a $35.00 target price on Applied Digital and gave the company a “buy” rating in a report on Wednesday. Needham & Company LLC dropped their price target on Applied Digital from $83.00 to $70.00 and set a “buy” rating on the stock in a research report on Thursday, October 8th. Finally, UBS Group reissued a “buy” rating on shares of Applied Digital in a report on Thursday, October 8th. 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 issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $59.75.

Applied Digital Stock Performance

The company has a debt-to-equity ratio of 3.90, a quick ratio of 2.56 and a current ratio of 2.56. The stock’s fifty day moving average is $25.28 and its two-hundred day moving average is $32.22. The firm has a market cap of $5.59 billion, a price-to-earnings ratio of -11.29 and a beta of 5.99.

Applied Digital (NASDAQ:APLD) last posted its earnings results on Wednesday, October 7th. The company reported ($0.01) earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($0.30) by $0.29. Applied Digital had a negative net margin of 51.28% and a negative return on equity of 27.21%. The firm had revenue of $300.39 million during the quarter, compared to analyst estimates of $116.29 million. During the same period in the previous year, the business posted ($0.03) EPS. Applied Digital’s revenue was up 367.8% on a year-over-year basis. On average, analysts expect that Applied Digital Corporation will post -2.06 earnings per share for the current fiscal year.

Insider Transactions at Applied Digital

In other news, Director Richard Nottenburg sold 75,000 shares of the business’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 transaction of $2,336,250.00. Following the completion of the transaction, the director directly owned 133,378 shares in the company, valued at approximately $4,154,724.70. The trade was a 35.99% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, CEO Wes Cummins acquired 55,803 shares of the firm’s stock in a transaction that occurred on Friday, October 16th. The stock was acquired at an average cost of $18.04 per share, with a total value of $1,006,686.12. Following the completion of the acquisition, the chief executive officer directly owned 5,874,453 shares in the company, valued at approximately $105,975,132.12. This represents a 0.96% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Insiders own 9.50% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of the business. FNY Investment Advisers LLC bought a new stake in shares of Applied Digital during the second quarter valued at about $37,000. Bartlett & CO. Wealth Management LLC lifted its holdings in Applied Digital by 244.3% in the first quarter. Bartlett & CO. Wealth Management LLC now owns 1,205 shares of the company’s stock worth $29,000 after purchasing an additional 855 shares during the period. Ancora Advisors LLC bought a new position in Applied Digital in the 2nd quarter valued at about $56,000. Creative Financial Designs Inc. ADV grew its position in Applied Digital by 691.8% in the 2nd quarter. Creative Financial Designs Inc. ADV now owns 1,536 shares of the company’s stock valued at $57,000 after buying an additional 1,342 shares in the last quarter. Finally, GAMMA Investing LLC increased its stake in Applied Digital by 28.5% during 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. 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 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.