Applied Digital (NASDAQ:APLD – Get Free Report) and International Business Machines (NYSE:IBM – Get Free Report) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.
Earnings & Valuation
This table compares Applied Digital and International Business Machines”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Applied Digital | $611.31 million | 11.43 | -$244.00 million | ($0.89) | -26.93 |
| International Business Machines | $67.53 billion | 3.46 | $10.59 billion | $11.27 | 22.03 |
Institutional and Insider Ownership
65.7% of Applied Digital shares are owned by institutional investors. Comparatively, 59.0% of International Business Machines shares are owned by institutional investors. 9.5% of Applied Digital shares are owned by company insiders. Comparatively, 0.3% of International Business Machines shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Applied Digital and International Business Machines, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Applied Digital | 2 | 1 | 11 | 3 | 2.88 |
| International Business Machines | 1 | 10 | 17 | 0 | 2.57 |
Applied Digital presently has a consensus target price of $68.15, suggesting a potential upside of 184.34%. International Business Machines has a consensus target price of $265.16, suggesting a potential upside of 6.79%. Given Applied Digital’s stronger consensus rating and higher possible upside, research analysts clearly believe Applied Digital is more favorable than International Business Machines.
Risk & Volatility
Applied Digital has a beta of 5.72, suggesting that its stock price is 472% more volatile than the S&P 500. Comparatively, International Business Machines has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.
Profitability
This table compares Applied Digital and International Business Machines’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Applied Digital | -37.78% | -16.42% | -4.00% |
| International Business Machines | 15.52% | 35.65% | 7.54% |
Summary
International Business Machines beats Applied Digital on 8 of the 15 factors compared between the two stocks.
About Applied Digital
Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.
About International Business Machines
International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.
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