What Happened?
Shares of digital infrastructure provider Applied Digital (NASDAQ:APLD) fell 10.1% in the morning session after the company announced significant new fundraising plans that involved issuing new stock.
Applied Digital disclosed it expected to receive $787.5 million in funding from Macquarie Asset Management. In exchange for this cash, the company planned to issue new shares. While the funds were intended to support the expansion of its AI data centers, investors reacted negatively to the news. The move raised concerns about diluting the value of existing shares. The deal also highlighted the company's reliance on major external funding for its operations and growth. Additionally, there were conditions attached to the financing, including the closing of a separate senior secured notes offering, which introduced uncertainty for investors.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Applied Digital? Access our full analysis report here.
What Is The Market Telling Us
Applied Digital’s shares are extremely volatile and have had 92 moves greater than 5% over the last year. But moves this big are rare even for Applied Digital and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 2.2% on the news that Needham reiterated its Buy rating on the company's stock, maintaining a price target of $41.00. The rating affirmation from analyst John Todaro reflected continued confidence in the company's strategic direction and market performance.
Applied Digital is up 202% since the beginning of the year, but at $23.59 per share, it is still trading 37.5% below its 52-week high of $37.76 from October 2025. Investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $344,888.
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