Applied Digital (NASDAQ:APLD) Shares Down 6.4% – Should You Sell?

Applied Digital Corporation (NASDAQ:APLD)’s stock price dropped 6.4% on Tuesday . The company traded as low as $35.68 and last traded at $36.62. Approximately 15,178,626 shares traded hands during trading, a decline of 42% from the average daily volume of 26,170,688 shares. The stock had previously closed at $39.14.

Applied Digital News Roundup

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

• Positive Sentiment: Applied Digital’s $7.5 billion, 15-year lease at Polaris Forge 3 pushed its total contracted capacity above 1 GW, strengthening long-term revenue visibility and confirming demand for its AI infrastructure platform.
• Positive Sentiment: Needham and Citizens JMP both raised price targets on APLD after the deal, reflecting improved confidence in backlog conversion and future growth. Needham says Polaris Forge 3 lease agreement could drive Applied Digital stock higher
• Positive Sentiment: The company’s total contracted lease revenue now stands at roughly $31 billion, giving investors more confidence that Applied Digital can scale its AI campus pipeline and monetize future capacity.
• Neutral Sentiment: Analysts noted the valuation is already rich, so the stock may remain volatile as investors weigh the large backlog against execution risk and high expectations.

Wall Street Analyst Weigh In

APLD has been the subject of a number of research reports. Citizens Jmp raised their target price on shares of Applied Digital from $40.00 to $60.00 and gave the stock a “market outperform” rating in a report on Thursday. Wall Street Zen cut shares of Applied Digital from a “hold” rating to a “sell” rating in a report on Saturday, April 11th. Lake Street Capital restated a “buy” rating and set a $70.00 target price (up from $55.00) on shares of Applied Digital in a report on Thursday. Zacks Research upgraded shares of Applied Digital from a “strong sell” rating to a “hold” rating in a report on Thursday, May 7th. Finally, Citigroup restated an “outperform” rating on shares of Applied Digital in a report on Thursday. Two analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, Applied Digital has an average rating of “Moderate Buy” and a consensus target price of $51.33.

Applied Digital Price Performance

The stock has a fifty day moving average price of $32.04 and a 200-day moving average price of $30.77. The company has a market cap of $13.72 billion, a PE ratio of -64.89 and a beta of 5.69. The company has a debt-to-equity ratio of 1.65, a current ratio of 2.38 and a quick ratio of 2.38.

Applied Digital (NASDAQ:APLD) last released its earnings results on Wednesday, April 8th. The company reported ($0.36) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.13) by ($0.23). The business had revenue of $108.55 million during the quarter, compared to analysts’ expectations of $78.47 million. Applied Digital had a negative net margin of 52.84% and a negative return on equity of 15.91%. Applied Digital’s revenue for the quarter was up 139.3% on a year-over-year basis. During the same quarter in the previous year, the company earned ($0.08) EPS. On average, equities analysts expect that Applied Digital Corporation will post -0.61 earnings per share for the current year.

Insider Buying and Selling

In other Applied Digital news, Director Richard N. Nottenburg sold 12,500 shares of the stock in a transaction that occurred on Thursday, April 30th. The shares were sold at an average price of $34.59, for a total value of $432,375.00. Following the completion of the sale, the director owned 208,378 shares in the company, valued at $7,207,795.02. This represents a 5.66% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director Douglas S. Miller sold 10,000 shares of the stock in a transaction that occurred on Monday, April 27th. The stock was sold at an average price of $34.98, for a total transaction of $349,800.00. Following the completion of the sale, the director owned 184,859 shares of the company’s stock, valued at approximately $6,466,367.82. The trade was a 5.13% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 35,000 shares of company stock valued at $1,182,175. Insiders own 9.50% of the company’s stock.

Institutional Investors Weigh In On Applied Digital

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in APLD. Teachers Retirement System of The State of Kentucky bought a new position in shares of Applied Digital during the 3rd quarter valued at $994,000. Federated Hermes Inc. bought a new position in shares of Applied Digital during the 3rd quarter valued at $3,204,000. AlphaQuest LLC bought a new position in shares of Applied Digital during the 3rd quarter valued at $1,369,000. MRA Advisory Group bought a new position in shares of Applied Digital during the 3rd quarter valued at $978,000. Finally, Vanguard Group Inc. raised its holdings in shares of Applied Digital by 23.2% during the 3rd quarter. Vanguard Group Inc. now owns 17,722,174 shares of the company’s stock valued at $406,547,000 after purchasing an additional 3,339,062 shares in the last quarter. Hedge funds and other institutional investors 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.