Shares of Applied Digital Corp. (APLD) plunged 17.52% on Monday, extending a volatile streak for the AI-infrastructure stock. The stock slipped another 0.35% in after-hours trading. The recent sell-off appears driven more by a broader market pullback in AI-infrastructure valuations than by company-specific news. Options activity was also elevated, with investors buying more puts to protect against potential losses, signaling caution over short-term stock swings.
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For context, Applied Digital specializes in AI infrastructure and data-center solutions, providing leased computing capacity to enterprise clients. Over the past five days, APLD stock has declined 28.14%. But overall, the stock is up 200% year-to-date.
Options Traders Turn Cautious on APLD Stock
APLD stock is trading around $22.98 as of close on Monday, September 15. Meanwhile, option traders show moderate caution on the stock.
Trading activity was high, with 69,000 contracts exchanged. More call options than puts were traded, resulting in a put/call ratio of 0.54, higher than the typical 0.37. At the same time, implied volatility climbed to 113.97, signaling that the stock could swing about $1.76 per day. The rising demand for puts indicates that some investors are seeking protection against further declines.
Using TipRanks’ Options tool, we can also see Unusual Options Activity for APLD.
What Lies Ahead for APLD?
Looking ahead, Applied Digital’s long-term revenue is supported by its agreements with CoreWeave (CRWV), totaling $11 billion in contracted lease revenue from the Polaris Forge 1 project. The expansion will boost the company’s total critical IT capacity to 400MW, with the new data center expected to be operational by mid-2027.
Is APLD a Good Stock to Buy?
While short-term caution persists, the company’s long-term outlook looks promising. On Wall Street, analysts remain highly bullish with a Strong Buy consensus rating on APLD stock based on 10 Buys assigned in the past three months.
Furthermore, the average Applied Digital’s share price target of $42.78 per share implies an upside of 86% from its current level.
