Applied Digital Shares Tank Almost 40% On 3Q, Why This Analyst Remains Bullish

Shares of Applied Digital Corp APLD tanked in early trading after the company reported disappointing earnings for its fiscal third quarter.

The company provided visibility into 200 megawatts (MW) coming online in 2026, versus expectations of 100 MW, according to Needham. 

The Applied Digital Analyst: Analyst John Todaro reiterated a buy and reduced the price target from $11 to $10.

The Applied Digital Thesis: The company reported softer-than-expected fiscal third-quarter results due to a technical difficulty weighing on the Cloud Services segment, Todaro said in the note.

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Applied Digital plans to sell off its Cloud Services segment, he added.

The company reported revenue of $53 million, short of consensus of $65 million, and adjusted EBITDA of $10 million, falling short of consensus of $18 million, the analyst stated.

Management said that the prior guardrail of $1 million EBITDA per MW seems conservative and indicated better lease economic expectations since 2024, Todaro said. "We get the sense mgmt. is in talks with major hyperscalers as well as smaller entities in its lease discussions to expedite timeline and potentially improve economics," he wrote.

APLD Price Action: Shares of Applied Digital had declined by 27.19% to $3.91 at the time of publication on Tuesday.

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