Applied Digital Corporation enters the final days of May in a completely different shape than last week — up 24% on the week to $48.98, reversing the prior week's 16.6% drop, with analysts lifting targets and shorts caught leaning the wrong way.
The Street has been unusually active. Multiple firms raised targets this week, all while maintaining Buy-equivalent ratings. B. Riley lifted to $66 on Wednesday. Needham moved to $66 on Thursday. Lake Street went to $70. Citizens raised to $60. Every move was upward, and the consensus mean now sits at $64.59 — still above the current price, implying roughly 32% further upside by the Street's own math. The bull case centres on Applied Digital's positioning in AI and HPC infrastructure, with hyperscaler partnerships and a large capacity pipeline seen as competitive moats. The bear case remains execution risk: community pushback on new construction, customer concentration, and the long lead times on hyperscaler contract signings. For now, the analysts are voting with the bulls.
Short positioning complicates the picture. At 27.5% of the free float — around 78.6 million shares — this is one of the more heavily shorted names in digital infrastructure, and the level has barely budged in a month. Shorts are not covering despite a 24% weekly rally. That is a notable standoff. The borrow market is cheap at 0.65% cost to borrow, up 21% on the week but still historically low, meaning shorts face little financial pressure to exit. Availability has tightened to around 57% from 88% a week ago — still in the normal range, but directionally tighter. The 52-week low availability reading of 0.11% is a reminder of how extreme this pool can get; for now, there is room to borrow, but the trend is moving in the wrong direction for bears.
Options are flashing a genuine warning. The put/call ratio jumped to 0.54 on Wednesday — more than three standard deviations above its 20-day average of 0.41, and the highest single-day reading in recent months, though still below the 52-week peak of 0.66. That spike stands out against the prior two weeks, where the PCR ran consistently below 0.44. With the stock up sharply, someone was buying downside protection aggressively into strength — a pattern more consistent with hedging a long than with outright bearishness, but worth noting either way.
Institutional ownership adds another layer. Goldman Sachs added roughly 6.3 million shares as of the March quarter, making it one of the more notable recent additions to the register. Vanguard entities appear as new entrants with combined holdings approaching 16 million shares. Hood River Capital remains the largest institutional holder at 8.1% of shares. D.E. Shaw trimmed by around 4.8 million shares over the same period — the clearest sign of active rotation in the holder base. The ORTEX short score is running at 70.6, near the top of its recent range, reflecting the combination of heavy short interest and a rising price.
The next earnings event is scheduled for July 21. The prior print on April 9 saw the stock fall 5.5% in a single session before recovering 8.3% over the following five days — a pattern where initial weakness gave way to buyers stepping in. The question heading into July is whether the continued analyst target-raising, against a backdrop of shorts holding firm and options traders adding downside hedges into a 24% weekly rally, marks a genuine inflection or another peak to fade.
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