AI Data Center Stock May Not Be Down for Long

Core Viewpoint - The current dip in Applied Digital Corp (APLD) shares presents a potential buying opportunity, especially following a recent decline influenced by negative outlooks from Qualcomm and increased AI spending at Alphabet [1][2]. Group 1: Stock Performance - APLD shares have decreased by 8.3%, trading at $28.91, marking the worst day in about a year and extending a pullback from a record peak of $42.27 on January 28 [1][2]. - The stock is currently near a historically bullish trendline, suggesting it may be an ideal time to buy the dip [2]. Group 2: Technical Indicators - APLD stock is within 0.75 of the 100-day moving average's 20-day average true range (ATR), having remained above this level 80% of the time in the past two weeks and 80% of the last 42 trading sessions [3]. - Historical data indicates that similar signals have led to a 75% chance of the stock being higher one month later, with an average gain of 15.8% [4]. Group 3: Market Sentiment - There is a notable unwinding of pessimism among options traders, with the 10-day put/call volume ratio ranking higher than 94% of readings from the past year, indicating increased bearish sentiment [6]. - APLD is also positioned for a potential short squeeze, with short interest rising by 13.1%, amounting to 86.25 million shares sold short, which represents 36.7% of the stock's available float [7].