Applied Digital (NASDAQ:APLD) Shares Gap Up – Should You Buy?

Shares of Applied Digital Corporation (NASDAQ:APLD) gapped up before the market opened on Wednesday. The stock had previously closed at $16.68, but opened at $18.13. Applied Digital shares last traded at $17.5660, with a volume of 3,864,007 shares traded.

Recent Applied Digital Headlines

These are some of the APLD headlines that stood out recently:

• Negative Sentiment: Morgan Stanley cut its price target to $25 from $41 while maintaining an Equal Weight rating, signaling reduced upside expectations. Morgan Stanley Just Cut Its Applied Digital Target From $41 to $25
• Negative Sentiment: Reports emphasize financing and leverage risks, including concern about Applied Digital’s exposure to CoreWeave and the tenant’s bond-market stress. Heavy capital requirements could make growth harder or more costly to fund. Applied Digital Carries CoreWeave Exposure as Tenant Bonds Signal Distress
• Negative Sentiment: Even bullish valuation cases acknowledge that APLD trades at a premium revenue multiple, leaving the stock vulnerable if growth expectations or financing conditions disappoint. Analyst Targets Remain Far Above the Tape, but Financing Risk Still Drives the Setup

Wall Street Analysts Forecast Growth

A number of analysts recently commented on the company. Morgan Stanley decreased their target price on Applied Digital from $41.00 to $25.00 and set an “equal weight” rating for the company in a research report on Monday. Citigroup reiterated a “market outperform” rating on shares of Applied Digital in a report on Thursday, October 8th. Rothschild & Co Redburn set a $22.00 price objective on Applied Digital and gave the company a “neutral” rating in a research note on Monday, September 21st. UBS Group reissued a “buy” rating on shares of Applied Digital in a research note on Thursday, October 8th. Finally, B. Riley Financial decreased their price objective on Applied Digital from $75.00 to $51.00 and set a “buy” rating for the company in a report on Friday, October 30th. 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. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $56.42.

Applied Digital Stock Performance

The business’s 50 day simple moving average is $22.29 and its two-hundred day simple moving average is $30.47. The company has a quick ratio of 2.56, a current ratio of 2.56 and a debt-to-equity ratio of 3.90.

Applied Digital (NASDAQ:APLD) last issued its quarterly earnings data 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. The firm had revenue of $300.39 million during the quarter, compared to analysts’ expectations of $116.29 million. Applied Digital had a negative net margin of 51.28% and a negative return on equity of 27.21%. The business’s revenue was up 367.8% on a year-over-year basis. During the same period last year, the company earned ($0.03) earnings per share. Equities research analysts predict that Applied Digital Corporation will post -2.17 EPS for the current year.

Insider Activity at Applied Digital

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

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the stock. Situational Awareness LP grew its holdings in Applied Digital by 14.1% during the second 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 in the last quarter. Equitec Proprietary Markets LLC bought a new position in Applied Digital during the 2nd quarter valued at $312,349,000. Voya Investment Management LLC boosted its holdings in Applied Digital by 43.8% during the 3rd quarter. Voya Investment Management LLC now owns 1,816,376 shares of the company’s stock worth $44,265,000 after acquiring an additional 552,856 shares during the last quarter. Hsbc Holdings PLC boosted its holdings in Applied Digital by 6.2% during the 1st quarter. Hsbc Holdings PLC now owns 1,240,239 shares of the company’s stock worth $28,377,000 after acquiring an additional 72,460 shares during the last quarter. Finally, Sei Investments Co. grew its stake in shares of Applied Digital by 33.0% in the 1st quarter. Sei Investments Co. now owns 1,093,701 shares of the company’s stock worth $25,964,000 after acquiring an additional 271,618 shares in the last quarter. Hedge funds and other institutional investors 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.