Applied Digital (APLD) Surges 19.38% on AI Infrastructure Momentum, Institutional Buying

Applied Digital (NASDAQ: APLD) surged 19.38% on Monday, extending its winning streak to 11 consecutive days with a cumulative gain of 76.03%. The stock reached an intraday high of 21.34% and touched its highest level since September 2025, driven by strategic momentum in the AI infrastructure sector and institutional investor activity.

The company’s recent performance is tied to expanded data center lease agreements with CoreWeave, a cloud provider, which have boosted its contracted capacity to 400 megawatts. These deals, projected to generate $11 billion in future revenue, align with the growing demand for AI and high-performance computing. APLD’s inclusion in Nvidia’s AI investment portfolio further underscores its positioning in the sector, which is seeing heightened demand for generative AI solutions.

Institutional confidence in APLD has grown, with BNP Paribas Financial Markets increasing its stake by 24,356.8% in Q2 2024, now holding $52.5 million worth of shares. Other investors, including Situational Awareness LP and Shellback Capital LP, have collectively added over $100 million to their holdings. Analysts from firms like Compass Point and JMP Securities have upgraded their price targets, with a consensus of $15.64 and a "Buy" rating, reflecting optimism about the company’s long-term growth.

Despite recent gains, insider selling has introduced short-term uncertainty. The CFO and a director sold shares totaling $1.44 million in September, representing significant reductions in their holdings. However, the market has largely shrugged off these sales, with the stock continuing its upward trajectory. APLD’s volatility remains high, with over 95 moves of more than 5% in the past year, attributed to its speculative AI infrastructure focus and reliance on long-term lease agreements.

Financially, APLD reported $38.01 million in Q2 2024 revenue, a 41.3% year-over-year increase, though it remains unprofitable with a net loss of $0.12 per share. Analysts project a negative EPS of -$0.96 for the current year, highlighting ongoing operational challenges. However, the $11 billion in contracted revenue and strategic shift to AI infrastructure suggest potential for improved profitability as contracts mature. The stock’s high beta and debt-to-equity ratio indicate risk, but investors appear focused on long-term growth amid the AI sector’s expansion.