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Applied Digital - AI Stock Analysis

Analysis generated December 24, 2024

Applied Digital is a technology company focused on providing advanced solutions in data processing, blockchain, and digital applications. It aims to drive innovation and efficiency through its services, capturing a diverse range of clients from various industries. Despite facing market volatility, the company has managed to demonstrate considerable growth and stability over the past year.

Fundamental Analysis

The revenue for Applied Digital in the last quarter was $61M. This figure represents an impressive increase of 137.53% compared to the previous quarter and a year-over-year increase of 90.18%. Such significant growth rates are indicative of the company's robust business model and effective strategies.

Furthermore, Applied Digital's net income for the last quarter was $4.2M, up by 93.41% from the previous quarter and 62.93% from the same quarter last year. This highlights the company's improving profitability and efficient cost management.

The EBITDA for the last quarter was $30M, showing an astounding 272.53% increase compared to the quarter before and a staggering 893.82% year-over-year growth. This sizable growth in EBITDA showcases the company's enhanced operating performance and growing core earnings.

However, it's worth noting that in the last couple of months, there have been instances of company insiders selling their stock, which could be seen as a potentially bearish signal and might reflect lower confidence in the stock's near-term performance.

Technical Analysis

Today, Applied Digital's stock price is $8.36. This marks a 15.13% decrease compared to a month ago, which might be concerning for investors focused on short-term performance. On the other hand, there's been a 16.27% increase compared to a year ago, suggesting a positive trend in the long term.

The recent trend appears bearish. The current SMA10 is 8.57, which is lower than the previous SMA10 of 8.63, indicating potential downward momentum in the stock's price movement. Additionally, with an RSI of 57.9, the stock is currently in a neutral condition, neither overbought nor oversold.

Alternative Data Analysis

Turning to alternative data indicators, Applied Digital shows one open position on major job boards, down by 67% in recent months. This might signal attempts to cut costs or improve margins, but it's not a positive sign for a company that's expected to be in a growth phase.

In contrast, customer acquisition metrics are promising. The company's website has seen an estimated 19,000 visitors, up by 138% over the last couple of months. This is a bullish trend that suggests potential growth in customer interest and engagement.

On social media, the company's engagement is also on the rise. Applied Digital’s Instagram page has 690 followers, a 5% increase over the past few months, while their Twitter page has 2,600 followers, a 40% increase. These metrics indicate growing interest and engagement from the public.

Additionally, the AltIndex's AI score for Applied Digital is 68, which is a positive indicator and a buy signal based on its comprehensive analysis combining fundamental, technical, and alternative data.

Conclusion

Applied Digital demonstrates significant strengths through strong revenue, net income, and EBITDA growth rates, suggesting efficient operations and sound business strategies. However, recent insider selling and the company's efforts to cut costs could signal caution.

On the technical front, the stock shows short-term bearish trends amidst long-term growth, and neutral RSI conditions suggest balanced buying/selling pressures. Alternative data points reveal promising customer acquisition and engagement trends, but a decrease in job postings poses concerns about future growth.

Overall, based on the combined analysis, Applied Digital presents itself as a stock with substantial upside potential in the long term, bolstered by strong fundamentals and promising alternative data trends. Careful consideration of short-term volatility and recent insider activities is recommended before making investment decisions.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.