APLD Stock Tumbles Despite Q3 Beat — Analyst Says Applied Digital Remains A 'Top Pick', Recommends Buying On Weakness

• Roth Capital highlighted that Applied Digital earned its first steady-state High-Performance Computing lease revenue from its 100-megawatt Polar Forge 1 facility in Q3.
• The firm stated that while Applied Digital did not announce any major leases during the quarter, the company’s fundamentals are strengthening.
• It expects a key near-term catalyst in the form of a direct financing lease and a new tranche of debt.

Applied Digital Corp. (APLD) shares declined more than 5% on Thursday morning despite beating Wall Street expectations on its third-quarter results.

Notably, Roth Capital stated that Applied Digital remains a “top pick,” according to TheFly. The firm stated that the third quarter (Q3) was a true inflection quarter for Applied Digital, with the company’s revenue more than doubling year-on-year. Applied Digital also stated that it is evolving into a pure-play data center platform.

Why Is Roth Capital Bullish On APLD?

Roth Capital noted that Applied Digital recorded its first steady-state High-Performance Computing (HPC) lease revenue from its 100-megawatt Polar Forge 1 facility in the third quarter.

The company stated that, of the $73.7 million year-on-year revenue increase during the quarter, $71 million was attributable to its HPC Hosting Business, while the remainder was due to performance improvements in its other segments. Applied Digital also added that the Polaris Forge 1 facility was fully operational during the third quarter.

Roth Capital said that while Applied Digital did not announce any major leases during the quarter, the company’s fundamentals are strengthening. The firm expects a key near-term catalyst in the form of a direct financing lease and a new debt tranche, while stating that it would use weakness in APLD stock to accumulate shares.

Roth Capital has a ‘Buy’ rating on the Applied Digital stock with a $58 price target, implying a potential upside of about 121% from current levels.

According to Koyfin data, the average 12-month price target for APLD is $49.58. Of the 12 analyst ratings, two have a ‘Strong Buy’ recommendation, while 10 have a ‘Buy’ rating.

Applied Digital’s Q3 Earnings Driven By Data Center Growth

Applied Digital reported earnings per share (EPS) of $0.09 on revenue of about $127 million, compared to Wall Street expectations of a loss of $0.11 per share on revenue of $78 million, according to Fiscal.ai data.

The company stated that it broke ground on Delta Forge 1 during the quarter, a 300MW facility with the campus spanning over 600 acres. Applied Digital expects to begin initial operations at this facility in mid-2027.

It also announced that a new 150MW HPC data center is currently under construction at the Polaris Forge 1 facility and is expected to come online during 2026. A third 150MW facility is expected in 2027.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Applied Digital trended in the ‘extremely bullish’ territory with message volumes at ‘extremely high’ levels at the time of writing.

One user commended the company’s earnings and said that buyers will be rewarded in the short term.

Another user stated that APLD stock trading below $34 following the earnings reflects a huge buying opportunity.

APLD stock is up 8% year-to-date and 378% over the past 12 months. The Vanguard Total Stock Market Index Fund ETF (VTI) is up 25% over the past 12 months, while the iShares Russell 2000 ETF (IWM) is up 38%.

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