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Applied Digital - AI Stock Analysis

Analysis generated September 5, 2024

Applied Digital is a company that operates in the technology sector, providing innovative digital solutions and services. While the specific details about its product offerings and services are not provided, the company is evidently engaged in a dynamic market with potential for both growth and volatility. Recent data demonstrates fluctuations in its financial performance and other key metrics, which will be analyzed in more depth in the following sections.

Fundamental Analysis

Looking at the fundamental aspects of Applied Digital, the revenue for the last quarter was $26M. This represents a significant decline of 34.42% compared to the previous quarter, which is a concern and may indicate potential issues in the company's business operations or market demand. However, it's worth noting that when compared to the same quarter last year, there is an increase of 15.96%. This positive year-over-year growth suggests that the company is expanding, albeit with some recent setbacks.

Net income for the last quarter was $64M, showing a slight decrease of 2.57% compared to the previous quarter. This dip is relatively minor but causes slight concern, especially when we see a stark decrease of 895.67% compared to the same quarter last year. Such a dramatic year-over-year decline indicates potential underlying issues that need to be addressed.

EBITDA for the last quarter was $17M, which is up by 56.92% against the previous quarter, signaling a strong improvement and a positive sign for the company's financial health. However, this is contrasted by a year-over-year decline of 282.71%, which again indicates significant volatility.

Technical Analysis

The current stock price of Applied Digital is $5.27. This represents an increase of 32.75% from a month ago, indicating a robust short-term uptrend and positive investor sentiment. Nevertheless, the price is down by 6.56% compared to a year ago, which raises concerns about its long-term growth trajectory.

The moving average trends support a bullish sentiment. The current SMA10 is 3.92, slightly higher than the previous SMA10 of 3.89, suggesting a potential continuation of the upward trend in stock price. The Relative Strength Index (RSI) is at 39, indicating a neutral market condition, neither overbought nor oversold.

Alternative Data Analysis

When considering alternative data such as job postings and employee sentiment, Applied Digital has 0 open positions, down by 100% in recent months. This trend is indicative of cost-cutting measures, which may signify either an attempt to improve margins or financial instability, neither of which is a strong indicator for a growing company.

Customer acquisition metrics paint a worrisome picture. The company's website has an estimate of 12,000 visitors, a 50% reduction in recent months, suggesting a loss of interest or customer base. This is a troubling development for future revenue growth.

Customer engagement details show Applied Digital has 650 followers on Instagram, down by 3% in recent months, reflecting waning interest. However, on Twitter, the company has 1,700 followers, which is up by 17%, indicating some positive engagement.

Finally, the AI score from AltIndex, which combines fundamental, technical, and alternative data, provides Applied Digital with a score of 41. This is a hold signal, suggesting that despite the mixed signals, investors might want to maintain their positions for now.

Conclusion and Recommendation

The analysis paints a complex picture for Applied Digital. Fundamental metrics show mixed signals with notable concerns in net income and EBITDA year-over-year changes. Technical analyses reveal a short-term bullish trend but long-term concerns. Alternative data adds to the worries with decreasing job postings, reduced web traffic, and mixed social media engagement.

Given the uncertain and volatile nature of the data, including the hold signal from the AI score, it is recommended to hold the stock for those currently invested. New investors might want to adopt a wait-and-see approach, looking for more stable indications of growth and improvement in the upcoming quarters.

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.