Applied Digital (NASDAQ:APLD) Stock Falls 8.8% – Should You Sell?

Applied Digital Corporation (NASDAQ:APLD)’s share price dropped 8.8% on Thursday. The company traded as low as $16.51 and last traded at $16.3320. Approximately 4,869,588 shares were traded during trading, a decline of 79% from the average session volume of 23,296,148 shares. The stock had previously closed at $17.91.

Applied Digital News Roundup

Here’s some of the latest news about APLD:

• Positive Sentiment: Strong results from customer CoreWeave—including improved revenue guidance and signs of pricing power—revived optimism about AI data-center demand and lifted APLD and other sector stocks in the prior session. That industry tailwind may help sentiment, though it has not erased recent weakness. Article: Applied Digital Could Be 71% Undervalued
• Neutral Sentiment: A construction-technology documentary featuring Applied Digital highlights real-time verification and delivery milestones at a data-center campus. It showcases execution capabilities, but does not announce a new contract or revenue. Article: XYZ Reality and McGough Documentary
• Negative Sentiment: Morgan Stanley lowered its APLD price target to $25 from $41 while retaining an Equal Weight rating, signaling reduced upside expectations. Article: Morgan Stanley Cuts Applied Digital Target

Wall Street Analysts Forecast Growth

Several analysts recently issued reports on APLD shares. Wells Fargo & Company reiterated an “overweight” rating and set a $55.00 price target (up from $50.00) on shares of Applied Digital in a research report on Thursday, October 8th. UBS Group restated a “buy” rating on shares of Applied Digital in a research report on Thursday, October 8th. Weiss Ratings restated a “sell (d-)” rating on shares of Applied Digital in a research note on Monday, October 19th. Needham & Company LLC reduced their target price on Applied Digital from $83.00 to $70.00 and set a “buy” rating on the stock in a report on Thursday, October 8th. Finally, Morgan Stanley decreased their price target on Applied Digital from $41.00 to $25.00 and set an “equal weight” rating on the stock in a research note on Monday. Three investment analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, two have assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $56.42.

Applied Digital Stock Down 3.6%

The firm’s fifty day moving average is $22.44 and its 200-day moving average is $30.56. The company has a market capitalization of $5.22 billion, a P/E ratio of -10.54 and a beta of 5.58. The company has a debt-to-equity ratio of 3.90, a quick ratio of 2.56 and a current ratio of 2.56.

Applied Digital (NASDAQ:APLD) last issued its quarterly earnings data on Wednesday, October 7th. The company reported ($0.01) EPS for the quarter, beating the consensus estimate of ($0.30) by $0.29. The business had revenue of $300.39 million during the quarter, compared to the consensus estimate of $116.29 million. Applied Digital had a negative net margin of 51.28% and a negative return on equity of 27.21%. The firm’s revenue was up 367.8% compared to the same quarter last year. During the same quarter in the prior year, the firm earned ($0.03) EPS. As a group, equities research analysts predict that Applied Digital Corporation will post -2.17 EPS for the current year.

Insider Buying and Selling

In other news, President Jason Gechen Zhang bought 300,000 shares of the stock in a transaction on Friday, October 16th. The stock was acquired at an average price of $18.86 per share, with a total value of $5,658,000.00. Following the acquisition, the president directly owned 2,839,227 shares in the company, valued at approximately $53,547,821.22. This trade represents a 11.81% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Wes Cummins bought 55,803 shares of the company’s stock in a transaction on Friday, October 16th. The stock was purchased at an average price of $18.04 per share, with a total value of $1,006,686.12. Following the completion of the transaction, the chief executive officer directly owned 5,874,453 shares of the company’s stock, valued at approximately $105,975,132.12. The trade was a 0.96% increase in their position. The disclosure for this purchase is available in the SEC filing. 9.50% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in APLD. Situational Awareness LP boosted its position in Applied Digital by 14.1% during the 2nd quarter. Situational Awareness LP now owns 15,384,616 shares of the company’s stock worth $574,000 after buying an additional 1,906,178 shares during the period. Equitec Proprietary Markets LLC bought a new position in shares of Applied Digital during the second quarter valued at $312,349,000. Voya Investment Management LLC raised its stake in shares of Applied Digital by 43.8% during the third quarter. Voya Investment Management LLC now owns 1,816,376 shares of the company’s stock valued at $44,265,000 after acquiring an additional 552,856 shares during the last quarter. Hsbc Holdings PLC lifted its holdings in shares of Applied Digital by 6.2% during the first quarter. Hsbc Holdings PLC now owns 1,240,239 shares of the company’s stock worth $28,377,000 after purchasing an additional 72,460 shares during the period. Finally, Sei Investments Co. lifted its holdings in shares of Applied Digital by 33.0% during the first quarter. Sei Investments Co. now owns 1,093,701 shares of the company’s stock worth $25,964,000 after purchasing an additional 271,618 shares during the period. Institutional investors and hedge funds own 65.67% of the company’s stock.

Applied Digital Company Profile

Applied Digital Corporation develops, builds and operates data centers designed for high-density computing. Its facilities support digital asset mining as well as high-performance computing workloads, including artificial intelligence applications, and the company provides hosting and infrastructure services to customers in these sectors. The company also offers cloud services that give customers access to computing capacity for demanding workloads. Its data center operations are focused in the United States, including facilities in North Dakota.