APLD Stock Is Back In The Green Overnight: What’s Behind The 3% Jump?

• Applied Digital reported Q4 revenue of $258.7 million, more than four times that of a year ago.
• “We are actively marketing an additional 1.7 gigawatts across multiple states and expect this new capacity to command higher pricing,” CEO Wesley Cummins said.
• Stocktwits sentiment for APLD flipped to ‘extremely bullish’ from ‘neutral,’ with traders expressing frustration over the muted stock move.

Shares of Applied Digital Corp. jumped more than 3% in overnight trading, erasing all of Monday’s losses from the broader market selloff that was fueled by a sharp decline in semiconductor stocks, as investors cheered the company’s upbeat quarterly results and optimistic outlook.

Applied Digital, which builds and manages data centers for hyperscalers and tech companies, reported strong earnings after the market close and said its new data center building would offer higher yields.

“I'm even more excited about our pipeline beyond the 1.41 gigawatts currently under construction, particularly as rental rates have moved higher over the past 6 months. We are actively marketing an additional 1.7 gigawatts across multiple states and expect this new capacity to command higher pricing,” CEO Wesley Cummins said on the company’s earnings call.

He added that demand was coming from new campuses as well as expansion at existing sites, and the company was in advanced negotiations with two customers to add 100 megawatts and 150 megawatts at their contracted data centers.

“We expect these expansion leases to be executed… at materially higher lease rates than the existing leases and possibly longer duration. If executed, these leases would bring our total capacity to 1.66 gigawatts and over $6 billion of additional contracted revenue based on existing rates and duration,” Cummins.

The executive’s comments underscore the insatiable demand for cloud capacity amid a boom in AI development and usage. Applied Digital, whose major customers include CoreWeave with Nvidia being a strategic investor in the company, is seen as a proxy for AI cloud infrastructure demand.

APLD Q4 Results Recap

Applied Digital reported fourth-quarter revenue of $258.7 million, an over four-times jump from sales in the corresponding quarter a year ago, and well above analyst expectations of $95.32 million. The company said it signed three new leases at its Delta Forge 1, Polaris Forge 3 and Delta Forge 2 sites.

“With these agreements, we have secured 1.4 gigawatts ("GW") of contracted critical IT load, representing approximately $36 billion in total contracted lease revenue — or approximately $86 billion if all renewal options are exercised,” the company said in its earnings statement. 

“We are building five multibillion-dollar AI Factory campuses for two hyperscalers and CoreWeave — a scale that we believe speaks to both the quality of our platform and the trust these customers place in our ability to execute.”

Meanwhile, BlackRock on Monday reported beneficial ownership of 12.2 million shares of Applied Digital, representing a 4.3% stake in the company. The shares are held by certain BlackRock business units grouped as the “Reporting Business Units.”

Retail View On APLD Stock

APLD was among the top 10 trending stocks on Stocktwits late Monday, with the retail sentiment for the stock flipping to ‘extremely bullish’ from ‘neutral.’

“$APLD market is nervous and wants to sell off, but this is holding well. The earnings were good. Hopefully if big dawgs earnings continue strong and the Fed stays neutral we can resume upwards shortly,” a trader said, referring to the central bank’s rate decision on Wednesday.

Another wrote: “$APLD Unfortunately the MM’s are pounding down Tech, many of these good companies are smashing earnings projections and usually sell off on the little bit of strength it provides.

APLD shares are up 7.6% year to date. In comparison, the tech-heavy Invesco QQQ Trust Series 1 (QQQ) is up 11.3%. 

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