We recently published a list of the 13 Best Artificial Intelligence Stocks Under $50 to Buy Now. In this article, we are going to take a look at where Applied Digital Corporation (NASDAQ:APLD) stands against other AI stocks under $50.
On May 8, Dan Ives of Wedbush Securities joined CNBC’s ‘Squawk on the Street’ to discuss his bullish outlook on the AI sector and tech. Ives used the metaphor of technology speeding down the highway at 100 mph in a Ferrari, while regulation lags in the slow lane at 35 mph. He emphasized that, given this disparity, much of the oversight will be self-regulatory, as the use cases for AI are expanding rapidly. He predicted continued consolidation in the sector and stated that regulatory efforts would not halt this trend. The discussion also touched on international trade, particularly regarding the UK, China, India, and Vietnam. Ives described any progress with the UK as a small but positive step, but stressed that the real focus for tech companies remains on China. He explained that while the UK relationship is notable, it does not have the same impact as China, and tech companies are closely monitoring developments in Asia because of their significance to larger deals. He also predicts that major tech players would acquire smaller or emerging private companies and argued that the ongoing AI revolution, unstoppable even in the face of tariffs, will drive companies to position themselves advantageously for the future, with consolidation playing a key role.
Ives acknowledged the current regulatory uncertainty and unexpected moves from major tech partners but maintained his bullish stance on big tech overall due to accelerating use cases and spending in the sector. Ives also discussed the enterprise adoption of agentic AI, or AI agents, and when their impact on business efficiency and margins would become evident. Ives emphasized that the AI revolution is spreading across software, cybersecurity, and the internet, and that tariffs will not impede this fourth industrial revolution. In fact, Ives thinks that tariffs might even accelerate AI adoption by increasing price pressures and driving companies to seek efficiencies, highlighting that this earnings season was pivotal, with accelerated spending on AI. He observed that AI-related budgets have surged from 1% to 2% a year ago to about 15% now, and argued that neither regulatory hearings nor tariffs can slow this momentum. He likened the current AI revolution to a decisive last-second play in basketball, as it’s delivering unexpected and transformative results for the tech sector.
Our Methodology
We first sifted through ETFs and financial media reports to compile a list of the top AI stocks under $50. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An overhead view of a large-scale data center with rows of servers and blinking lights.
Applied Digital Corporation (NASDAQ:APLD)
Share Price as of May 12: $5.39
Number of Hedge Fund Holders: 42
Applied Digital Corporation (NASDAQ:APLD) provides digital infrastructure solutions and cloud services for the HPC and AI industries. It operates through three segments: Data Center Hosting Business, Cloud Services Business, and HPC Hosting Business. It also offers infrastructure services to crypto mining customers and GPU computing solutions for workloads related to AI, ML, and other HPC tasks.
As of FQ3 2025, Applied Digital operates 286 megawatts of fully contracted data center hosting capacity for currency clients across 2 locations in North Dakota, which are both running at full capacity and making $35.2 million in revenue for the quarter. On April 15, Kevin Dede from H.C. Wainwright maintained a Buy rating on Applied Digital Corp. (NASDAQ:APLD) but lowered the price target from $12 to $7.
The Ellendale campus is expected to be a major growth catalyst for the company. This is Applied Digital’s next-gen data center development in North Dakota, which is backed by significant financing. This includes a potential investment of ~$5 billion from Macquarie Asset Management and a $375 million financing arrangement with Sumitomo Mitsui Bank Corporation. The first 100-megawatt building is expected to generate revenue in late 2025.
Overall, APLD ranks 4th on our list of the best artificial intelligence stocks under $50 to buy now. While we acknowledge the growth potential of APLD, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than APLD but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.