From Applied Digital Euphoria to Sell-Off: APLD Stock Tanks Below $10
After a brief, spectacular rally, Applied Digital’s stock has suffered a sharp reversal as investor optimism over its CoreWeave deal...
Quick overview
- Applied Digital's stock initially surged 128% following a major 15-year lease agreement with CoreWeave, promising $7 billion in revenue.
- Investor optimism quickly faded when CoreWeave liquidated its entire stake in Applied Digital, leading to a sharp decline in stock value.
- By late June, APLD had lost 33% of its value, with ongoing concerns about the company's unprofitability exacerbating the sell-off.
- The outlook remains cautious as investor trust is shaken, and the stock faces scrutiny without new developments to restore confidence.
After a brief, spectacular rally, Applied Digital’s stock has suffered a sharp reversal as investor optimism over its CoreWeave deal collapsed.
The Initial Surge: Hype Over Massive CoreWeave Deal
In June, Applied Digital Corporation (NASDAQ: APLD) stunned investors with news of a major 15-year lease agreement with CoreWeave, a prominent Nvidia-backed cloud computing firm. The deal promised an eye-popping estimated $7 billion in revenue over its lifetime, tied to 250 megawatts of data center capacity at Applied’s Ellendale, North Dakota facility.
Market enthusiasm was immediate and extreme. APLD shares soared 128% in just days, easily breaking the $12 resistance level and reaching an intraday high of $15.42. The company briefly became one of the hottest tech infrastructure plays on Wall Street, drawing in both institutional and retail investors eager to ride the wave.
The Sudden Reversal: CoreWeave Sells Out
But the excitement didn’t last. Momentum abruptly reversed when a June 10 Schedule 13G filing revealed that CoreWeave, once touted as Applied Digital’s transformative partner, had completely liquidated its ownership stake in APLD.
The filing confirmed CoreWeave’s beneficial ownership had dropped to 0.0%, shocking the market. Investor confidence took a serious hit, as the exit cast doubt on the entire deal and its promised windfall.
This revelation, coupled with concerns about Applied Digital’s ongoing unprofitability—it reported a negative EPS of -$1.47 over the past twelve months—drove a dramatic sell-off. Many investors feared that the highly publicized agreement might never deliver the anticipated revenue boost needed to offset the company’s losses.
The Steep Decline: Heavy Losses Into July
By the last week of June, APLD had surrendered 33% of its value from recent highs, erasing much of its spectacular rally. After a period of relative calm last week, the selling pressure returned to kick off the new week on a decidedly bearish note.
Today, the stock opened with a sharp downside gap at $10.14 and quickly fell to a session low of $9.35. Though it managed to recover slightly off its worst levels, it remained down nearly 8% for the day, underscoring the fragile sentiment around the name.
Outlook: Investor Caution Remains
For now, Applied Digital faces an uphill battle to rebuild investor trust. While the initial CoreWeave announcement showcased the company’s potential in the booming AI and cloud space, the subsequent unraveling of that partnership has left deep skepticism about its path to profitability.
Without a clear resolution or new deal to reignite optimism, APLD’s share price may remain under heavy scrutiny—and pressure—from a market wary of another hype-driven collapse.
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