Applied Digital (NASDAQ:APLD) Shares Down 8% Following Weak Earnings
by Michael Walen · The Markets DailyApplied Digital Corporation (NASDAQ:APLD – Get Free Report)’s share price traded down 8% on Thursday after the company announced weaker than expected quarterly earnings. The stock traded as low as $25.07 and last traded at $25.57. 35,541,270 shares changed hands during trading, an increase of 31% from the average session volume of 27,151,771 shares. The stock had previously closed at $27.79.
The company reported ($0.36) EPS for the quarter, missing analysts’ consensus estimates of ($0.13) by ($0.23). The company had revenue of $108.55 million for the quarter, compared to the consensus estimate of $78.47 million. Applied Digital had a negative net margin of 43.49% and a negative return on equity of 13.53%. The company’s revenue was up 139.3% compared to the same quarter last year. During the same quarter last year, the company earned ($0.08) earnings per share.
Key Headlines Impacting Applied Digital
Here are the key news stories impacting Applied Digital this week:
- Positive Sentiment: Revenue and demand beat — Q3 revenue surged ~139% y/y (driven by HPC/AI data-center demand and hyperscaler deals), topping estimates and signaling strong secular demand for the company’s capacity. Zacks: Q3 Revenues Rise
- Positive Sentiment: Long-term commercial traction — multiple reports highlight large hyperscaler and long-term lease commitments that support revenue runway and the company’s expansion thesis. Reuters: Revenue Beat
- Neutral Sentiment: Analyst support vs. mixed ratings — Citizens Jmp reaffirmed a market outperform rating with a $40 PT, offering upside narrative, while Zacks added APLD to a Strong Sell list; this creates mixed sell-side signals. Benzinga: Price Target Zacks: Strong Sell List
- Neutral Sentiment: Elevated options & volume — unusually large call activity and heavy share volume indicate active positioning and higher volatility (can amplify moves in either direction). (Reported after-hours/options flow)
- Negative Sentiment: Wider-than-expected GAAP loss — APLD reported a net loss of $0.36/sh (vs. consensus ~ -$0.10 to -$0.13), a larger-than-expected EPS miss that pressured sentiment despite the revenue beat. Proactive: Earnings Reaction
- Negative Sentiment: Non‑cash charges and stock‑based comp weighed results — investors focused on large write‑downs and elevated stock‑based compensation that drove the bigger loss and cloud near‑term profitability. Schaeffers: Q3 Net Loss
- Negative Sentiment: Balance-sheet & interest‑cost risk — rapid expansion (500MW buildout commitments) has increased debt and interest exposure, raising concerns about cash flow coverage and margin pressure as interest rates rise. Zacks: Debt/Interest Concerns
Analysts Set New Price Targets
Several brokerages recently weighed in on APLD. Northland Securities set a $56.00 price objective on Applied Digital in a report on Wednesday, January 28th. Wall Street Zen upgraded Applied Digital from a “sell” rating to a “hold” rating in a research report on Saturday, January 10th. Lake Street Capital reiterated a “buy” rating and issued a $45.00 price target on shares of Applied Digital in a report on Tuesday, December 30th. Arete Research began coverage on Applied Digital in a research note on Wednesday, January 7th. They set a “buy” rating on the stock. Finally, Needham & Company LLC reaffirmed a “buy” rating and issued a $41.00 price objective on shares of Applied Digital in a report on Thursday, January 8th. Two equities research analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Applied Digital has a consensus rating of “Buy” and a consensus price target of $39.20.
View Our Latest Stock Analysis on Applied Digital
Insider Activity
In other Applied Digital news, CEO Wes Cummins sold 165,000 shares of the business’s stock in a transaction dated Friday, January 16th. The shares were sold at an average price of $36.42, for a total transaction of $6,009,300.00. Following the completion of the transaction, the chief executive officer directly owned 4,176,329 shares of the company’s stock, valued at $152,101,902.18. The trade was a 3.80% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Douglas S. Miller sold 10,000 shares of the company’s stock in a transaction dated Monday, January 12th. The stock was sold at an average price of $38.54, for a total transaction of $385,400.00. Following the completion of the transaction, the director owned 200,859 shares of the company’s stock, valued at approximately $7,741,105.86. This trade represents a 4.74% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders sold 244,593 shares of company stock worth $9,003,278. 9.50% of the stock is owned by insiders.
Hedge Funds Weigh In On Applied Digital
Hedge funds and other institutional investors have recently made changes to their positions in the business. Newbridge Financial Services Group Inc. grew its holdings in Applied Digital by 8.6% in the 4th quarter. Newbridge Financial Services Group Inc. now owns 3,800 shares of the company’s stock worth $93,000 after buying an additional 300 shares in the last quarter. Concurrent Investment Advisors LLC raised its stake in Applied Digital by 1.5% during the 4th quarter. Concurrent Investment Advisors LLC now owns 21,332 shares of the company’s stock valued at $523,000 after acquiring an additional 318 shares in the last quarter. Brookstone Capital Management boosted its position in Applied Digital by 3.6% during the 4th quarter. Brookstone Capital Management now owns 9,275 shares of the company’s stock worth $227,000 after acquiring an additional 321 shares during the period. ProShare Advisors LLC boosted its position in Applied Digital by 1.0% during the 3rd quarter. ProShare Advisors LLC now owns 36,652 shares of the company’s stock worth $841,000 after acquiring an additional 376 shares during the period. Finally, Independent Advisor Alliance grew its stake in shares of Applied Digital by 4.6% in the fourth quarter. Independent Advisor Alliance now owns 9,215 shares of the company’s stock worth $226,000 after purchasing an additional 407 shares in the last quarter. 65.67% of the stock is currently owned by institutional investors and hedge funds.
Applied Digital Stock Performance
The company has a market cap of $7.15 billion, a P/E ratio of -47.35 and a beta of 7.25. The company has a quick ratio of 4.82, a current ratio of 4.82 and a debt-to-equity ratio of 1.79. The company has a 50 day moving average price of $29.29 and a 200-day moving average price of $29.47.
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.