Applied Digital (APLD) stock has been struggling to stage a meaningful comeback in recent weeks — but options traders believe some recovery is likely following the company’s Q1 earnings on Oct. 7. Consensus is for the artificial intelligence (AI) infrastructure firm to record a loss of $0.25 per share for its first financial quarter.
At the time of this writing, Applied Digital shares are down about 50% versus their year-to-date high.
Where Options Data Suggests APLD Shares Are Headed
According to options data from Barchart, the near-term earnings disappointment is already priced into APLD stock.
The put-to-call ratio on contracts expiring Oct. 9 sits at 0.29x currently, with a reading below 1.00x typically interpreted as constructive.
Data also pegs the upper price on those options contracts at $27.65, signaling Applied Digital could rally nearly 10% on the back of its upcoming earnings event.
That said, insiders apparently do not share that optimism; company executives have recorded about 18 sell transactions in the trailing 12 months against not even a single purchase, indicating those closest to operations are not entirely convinced that APLD will recover swiftly.
Texas Capital Sees Massive Upside in Applied Digital Stock
On the flip side, Texas Capital issued a bullish research note on Applied Digital shares yesterday morning, maintaining a “Buy” rating and a compelling $71 price target.
The investment firm expects international expansion to drive APLD up some 200% from here over the next 12 months.
Note that the Nasdaq-listed company has already secured its first deal outside the U.S., committing to providing up to 1 GW of power capacity in Finland.
“The agreement meaningfully expands Applied Digital’s marketable power portfolio amid a macro backdrop short both power and large-scale development campuses preferred by hyperscalers,” analysts told clients.
What’s the Consensus Rating on Applied Digital?
Other Wall Street firms seem to agree with Texas Capital’s constructive stance on APLD shares as well.
According to Barchart, the consensus rating on Applied Digital sits at “Strong Buy,” with the mean price target of about $63 indicating potential upside of a whopping 150% from current levels.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.