APLD Stock Tumbles As Investors Book Profit at Resistance – Time to Sell?
Applied Digital stock surged on upbeat earnings and a blockbuster AI infrastructure deal, but momentum is now cooling at key resistance.
Quick overview
- Applied Digital stock rose sharply following a strong Q4 earnings report and a significant AI infrastructure deal with CoreWeave.
- The company's earnings beat expectations with a non-GAAP net loss of only $0.03 per share, signaling improved operational efficiency.
- A major expansion of the CoreWeave contract is expected to generate an additional $4 billion in revenue, increasing the total deal value to $11 billion.
- Despite the positive developments, the stock has struggled to break through the $15.40 resistance level, leading to a recent selloff.
Applied Digital stock surged on upbeat earnings and a blockbuster AI infrastructure deal, but momentum is now cooling at key resistance.
APLD Retreats After Earnings Beat and CoreWeave Boost
Applied Digital Corporation (NASDAQ: APLD) made a strong comeback this week, thanks to a better-than-expected Q4 earnings report and a significant expansion of its AI infrastructure partnership with CoreWeave Inc. Yet despite the positive momentum, the rally appears to have stalled near a stubborn resistance level.
Stronger Q4 Results Shift Sentiment
The company’s quarterly report came in better than feared, with a non-GAAP net loss of only $0.03 per share—an 81% earnings beat compared to the average Wall Street estimate of a $0.14 loss. That upside surprise helped to reassure investors, signaling potential improvement in operational efficiency or cost controls across the business.
The report suggests Applied Digital is navigating its spending more effectively, or perhaps benefiting from stronger-than-expected margins within its core data infrastructure operations. Either way, the narrowed loss helped restore confidence ahead of the upcoming Q2 earnings season.
Massive CoreWeave Deal Lifts Revenue Outlook
In tandem with its Q4 report, Applied Digital confirmed that CoreWeave Inc. (NASDAQ: CRWV) had exercised an option to expand its contracted IT load capacity. The agreement adds 150 megawatts to the original 250 MW deal, raising the total to 400 MW.
This extended contract is projected to bring in an additional $4 billion in revenue, pushing Applied Digital’s total deal value with CoreWeave to an impressive $11 billion. The announcement immediately boosted APLD shares, which gapped up above the key $10 level and climbed steadily for most of the week.
APLD Stock Chart Daily – Rejected at Resistance Once Again
Profit-Taking Emerges at Resistance
Despite the bullish headlines and strong price action, Applied Digital failed once again to decisively break above the $15.40 resistance zone—a level that’s capped prior rallies. Since reaching that ceiling, the stock has dropped roughly 12%, suggesting that investors may be cashing in some gains after the sharp run-up.
Today’s selloff could be attributed to short-term profit-taking heading into the weekend, especially after such a dramatic rebound. While the long-term fundamentals appear to be strengthening, the inability to clear resistance may continue to weigh on short-term sentiment.
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