What Happened?
Shares of digital infrastructure provider Applied Digital (NASDAQ: APLD) jumped 22.2% in the morning session after the company reported third-quarter 2025 results that beat Wall Street's top and bottom-line estimates.
Revenue for the quarter grew 84% year on year to $64.22 million, surpassing analyst forecasts by 17.6%. The company also posted a smaller-than-expected adjusted loss of $0.03 per share, which was significantly better than the consensus estimate for a loss of $0.16 per share. However, the results were mixed, as adjusted EBITDA fell short of expectations, and the company's operating margin worsened compared to the same period last year. Despite the underlying challenges with profitability and cash burn, investors appeared to focus on the strong revenue and earnings beat, sending the shares sharply higher.
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What Is The Market Telling Us
Applied Digital’s shares are extremely volatile and have had 91 moves greater than 5% over the last year. But moves this big are rare even for Applied Digital and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 6.6% on the news that a broader rally in artificial intelligence (AI) related stocks and positive company-specific developments lifted sentiment. The positive sentiment for the company followed its successful pivot from cryptocurrency mining to designing and operating specialized data centers for AI. Adding to the tailwind, the entire tech sector received a boost after a major chip deal between AMD and OpenAI was announced, which fueled enthusiasm for AI-related companies.
Applied Digital is up 348% since the beginning of the year, and at $34.98 per share, has set a new 52-week high. Investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $388,671.
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