5 Underperforming Data Center Stocks to Buy According to Short Sellers

4. Applied Digital Corp (NASDAQ:APLD)

One-month Performance: -30.9%

Over the last month, Applied Digital Corp (NASDAQ:APLD) lost approximately 31% of its value. Despite a short rebound in mid-June, it remained under pressure and resumed its downward trend. Even with the recent decline, analysts remain optimistic about the company’s long-term prospects. On July 2, Craig-Hallum analyst George Sutton reiterated a Buy rating on the shares without assigning it any price target. However, among the 14 Wall Street analysts covering the stock, the stock carries a median price target of $74.5, suggesting an additional 125% upside from here on.

Further reinforcing the positive outlook, several analysts raised their price targets on Applied Digital Corp (NASDAQ:APLD) during the month of June. This includes Northland Securities, Lucid Capital, Lake Street, and Needham. On June 9, John Todaro from Needham raised the firm’s price target on the stock from $66 to $83 while keeping a Buy rating. The firm raised its price target following Applied Digital’s long-term lease agreement for its Delta Forge 2 AI-focused data center.

Needham analyst John Todaro stated in a note to clients:

We raise our PT as we believe APLD can continue to source new sites for the pipeline and execute additional leases. Further, we expect pricing improvements from here as the company looks to slate in new IG hyperscalers and neo-cloud customers.

Applied Digital Corp (NASDAQ:APLD) builds and operates digital infrastructure for AI and computing companies in North America. The company provides data centres and GPU computing solutions for businesses working in AI. It is headquartered in Dallas, Texas, and was founded in 2021 by Wes Cummins and Jason Zhang.