APLD stock drops 27% after Q3 loss, but long-term growth potential in HPC market

From Nasdaq.: 2025-04-24 11:33:00

Shares of Applied Digital Corporation (APLD) have dropped 27.4% after reporting a wider-than-expected loss of 16 cents per share for the third quarter of fiscal 2025. Revenues of $52.9 million missed estimates by 16.75%, mainly due to a decline in Cloud Services sales. The stock’s decline is attributed to the earnings miss and higher costs.

Despite the recent performance, the long-term growth story for APLD remains intact, making a case for holding onto the stock. While the near-term challenges exist, the company’s plans to expand into high-performance computing (HPC) hosting could drive revenue growth. The global HPC market is expected to grow significantly, providing opportunities for APLD.

APLD expects to resolve technical issues in its Cloud Services business and increase its data center hosting capacity to drive growth. The company’s valuation, though currently high, could be justified by its growth prospects in the HPC segment. Investors with a high risk tolerance may find APLD’s potential for substantial rewards appealing, given its partnerships and growth plans.

In conclusion, while APLD’s stock has declined, potential growth avenues in the HPC segment and partnerships with industry leaders like NVIDIA position the company for long-term success. Investors are advised to hold onto APLD for now, considering the potential for recovery in the Cloud Services business and future growth prospects in the HPC market.



Read more at Nasdaq.: How to Play APLD Stock After a 27% Decline Following Q3 Results?