Applied Digital Turmoil: APLD Stock Crashes 33% on Equity Exit—Will $10 Hold?
Applied Digital's stock experienced a meteoric rise and a sharp reversal after a major cloud deal with CoreWeave turned turbulent within...
Quick overview
- Applied Digital's stock surged 128% following a $7 billion cloud contract with CoreWeave, attracting significant investor interest.
- The excitement quickly faded when CoreWeave sold its entire equity stake in Applied Digital, leading to a 33% drop in APLD shares.
- Investors are now focused on whether APLD can find support near the $6 price level, as the market's trust has been shaken.
- The situation highlights the volatility of small-cap tech firms and the importance of maintaining investor confidence.
Applied Digital’s stock experienced a meteoric rise and a sharp reversal after a major cloud deal with CoreWeave turned turbulent within days.
Initial Euphoria: APLD Soars on $7 Billion Cloud Contract
Applied Digital Corporation (NASDAQ: APLD) stunned investors and tech market watchers earlier this month after unveiling a massive 15-year lease agreement with CoreWeave, a prominent Nvidia-backed cloud computing firm. The lease covered 250 megawatts of data center capacity at Applied’s Ellendale, North Dakota facility—an announcement that projected approximately $7 billion in revenue over the duration of the contract.
Market enthusiasm erupted almost instantly. Within days, APLD shares more than doubled, surging 128% and smashing past the key $12 resistance level to reach an intraday high of $15.42. For a brief moment, the stock was one of the most explosive movers in the tech infrastructure space, catching the attention of retail and institutional investors alike.
Reversal Shock: CoreWeave’s Quiet Exit Sparks Sell-Off
But the momentum abruptly reversed. The optimism unraveled just as quickly after a June 10 Schedule 13G filing revealed that CoreWeave—despite being Applied Digital’s newest and most prominent partner—had entirely sold off its equity stake in APLD. The document confirmed that CoreWeave now holds 0.0% beneficial ownership in Applied Digital.
APLD Stock Chart Daily – Can the 20 SMA Hold?
The divestiture came only days after the deal announcement, leaving many investors blindsided and questioning the long-term implications of the lease. The stock’s sharp gains rapidly faded, and APLD tumbled 33% this week alone. On Friday, the shares closed at $10.24 after dipping as low as $10.13 during the session. Volume also dropped substantially, with trading volume down nearly 60% compared to the prior session.
What’s Next: Support Levels and Market Watch
Now that APLD has given up more than half of its gains, attention is shifting to whether the stock can find support. The pre-surge price level near $6 remains a key technical zone that investors are eyeing for a potential bottom. If the decline continues, that range may offer a fresh opportunity—particularly if fundamentals around the lease remain intact despite CoreWeave’s divestment.
While the cloud contract still exists on paper, the market’s trust has been shaken. Applied Digital now faces the task of rebuilding credibility and proving that the deal remains financially beneficial, even without CoreWeave’s equity involvement.
Conclusion: Applied Digital’s recent ride illustrates the volatility and vulnerability of small-cap tech firms tied to larger players. What began as a breakout on groundbreaking contract news has quickly turned into a cautionary tale. If APLD can stabilize above key support zones and reaffirm the strength of its lease with CoreWeave, the longer-term story may still hold promise—but investor confidence needs time to rebuild.
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