TLDR
- Texas Capital upgraded Applied Digital to Strong-Buy, joining multiple brokers raising price targets to as high as $53
- Q3 revenue hit $126.59 million, up 250.1% year-over-year, beating estimates by over $44 million
- Company posted ($0.11) EPS loss, missing expectations of ($0.09), with analysts forecasting ($0.96) loss for fiscal year
- CEO Wes Cummins sold 165,000 shares worth $6 million, part of 526,641 insider shares sold in 90 days
- Applied Digital broke ground on Delta Forge 1, a 430 MW AI Factory campus in southern U.S.
Applied Digital received a boost on Tuesday when Texas Capital upgraded the stock to Strong-Buy. The move continues a wave of analyst optimism that’s pushed the stock’s consensus rating to Buy.
Applied Digital Corporation, APLD
The upgrade comes as APLD trades at $35.06 with a market cap of $9.80 billion. The stock has climbed from a 12-month low of $3.31 to a high of $40.20.
HC Wainwright doubled their price target from $20 to $40 in October. B. Riley went even higher, setting a $53 target earlier this month. Needham maintains a $41 price objective while Craig Hallum raised theirs to $39.
The consensus target sits at $33.27 across analysts covering the stock. Three analysts rate it Strong Buy, twelve say Buy, and one has issued a Sell rating.
Revenue Surges Past Expectations
Applied Digital reported third quarter results on January 7th that crushed revenue estimates. The company brought in $126.59 million versus the $82.22 million analysts expected.
That revenue number represents a 250.1% jump compared to the same quarter last year. The growth rate reflects the company’s rapid expansion in AI infrastructure.
However, profitability remains elusive. APLD posted a loss of ($0.11) per share, slightly worse than the ($0.09) analysts forecast. The company operates with a negative net margin of 43.49% and a negative return on equity of 13.53%.
Analysts expect the full fiscal year to show losses around ($0.96) per share. The company’s PE ratio stands at -64.93.
Insider Sales and Institutional Holdings
CEO Wes Cummins sold 165,000 shares on January 16th at $36.42 per share. The transaction totaled $6 million and reduced his stake by 3.80%. He still owns 4,176,329 shares worth roughly $152 million.
Director Chuck Hastings sold 25,000 shares in October at $34.27. Over the past 90 days, insiders have sold 526,641 shares worth $18.6 million total.
Insiders currently own 9.5% of the company. Institutional investors hold 65.67% of shares. Recent institutional buyers include Atlantic Union Bankshares, Noble Wealth Management, and Albion Financial Group, each taking small positions worth around $25,000.
Applied Digital announced it broke ground on Delta Forge 1, an AI Factory campus in the southern United States. The facility will support 430 MW of total utility power, enabling up to 300 MW of critical IT load. The company says the campus can scale considerably starting in 2028.
“Delta Forge 1 represents the next stage of Applied Digital’s growth, as we continue to deliver AI infrastructure through disciplined execution,” Cummins said. He noted the campus will be built to scale alongside hyperscale demand while delivering operational certainty for customers.
The stock maintains a beta of 6.89, indicating high volatility compared to the broader market. Its 50-day moving average sits at $28.25 while the 200-day average is $23.29. The company has a debt-to-equity ratio of 1.79 with a quick ratio and current ratio both at 4.82.
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