Applied Digital (NASDAQ:APLD), a firm that pivoted from being a Bitcoin miner to a budget AI cloud service provider, is under scrutiny from investor watchdogs Wolfpack Research and The Bear Cave. Both entities suggest that Applied Digital’s rapid stock rise of 800% over the past year may be due to dubious promotional tactics rather than genuine growth. As a result, the stock is being hammered at the time of writing.
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Highlighted was Applied Digital’s close ties with investment bank B. Riley, whose insiders hold nearly half the company’s shares. Also questioned are the CEO’s claims of a significant GPU investment for their AI Cloud service, an amount that astonishingly exceeds their market cap. Other concerns include a lack of subdomains compared to industry norms, potential physical hosting limitations, and questionable board competence. The overall implication is that Applied Digital’s claims of being an AI heavyweight are doubtful at best.
A look at the past five trading days for APLD stock highlights the level of impact the short reports had on it. Indeed, shares plunged over 18% at the time of writing. As a result, investors are now down almost 24% during this timeframe.