Applied Digital Rises 0.32% Amid Parent's Mixed Q2 Earnings and 263rd-Ranked 31.63% Volume Drop

On August 21, 2025, Applied Digital (APLD) rose 0.32% with a trading volume of $0.32 billion, down 31.63% from the prior day, ranking 263rd in market activity. The stock’s performance followed mixed signals from its parent company, Applied Materials (AMAT), which reported Q2 revenue of $7.30 billion, exceeding estimates, but issued softer-than-expected guidance for Q3. Management attributed the quarterly strength to robust semiconductor demand but flagged ongoing challenges in China and export restrictions as headwinds. CFO Brice Hill noted prolonged weakness in advanced logic demand and uncertainty around Chinese capacity digestion, while CEO Gary Dickerson highlighted growth potential in advanced packaging, a segment expected to more than double in size over the next few years.

B. Riley downgraded its FY2025 EPS estimate for AMAT to $9.35 from $9.55, maintaining a “Buy” rating and $215 price target. The move reflects cautious optimism despite the company’s Q2 beat and strong EBITDA margins. Analysts emphasized the need to monitor China-related sales, export license approvals, and customer investment cycles in logic and memory production. Institutional ownership remains stable, with hedge funds and investors like Runnymede Capital and Clal Insurance increasing stakes in Q1 and Q2. However, the stock’s elevated beta of 1.70 and recent volatility underscore sensitivity to macroeconomic risks, including the Fed’s upcoming policy decisions.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to 2025 yielded a total return of 31.52% over 365 days, with a 0.98% average daily gain. The approach showed best performance in June 2023 (7.02%) and worst in September 2022 (-4.20%), indicating short-term momentum capture amid market fluctuations. This aligns with APLD’s recent trading pattern, where liquidity and volume shifts remain key drivers of price action.