Applied Digital Director Sells $2.6 Million in Stock Amid 400% Rally

Chuck Hastings, a director at Applied Digital Corporation (NASDAQ:APLD), reported selling 75,000 shares of the AI data center firm in multiple open-market transactions on Wednesday and Friday, according to an SEC Form 4 filing.

Transaction Summary

The transaction value is based on the SEC Form 4 weighted average purchase price, while the post-transaction value is based on the price as of market close on Friday.

Key Questions

What proportion of Chuck Hastings' direct holdings was sold in this transaction?
This disposition represented 15% of his direct ownership immediately before the trades.

How does the trade size compare to his recent insider selling cadence?
Hastings' transaction history shows three Form 4s for sales of Applied Digital, including one in which he sold 30,000 shares on August 12 and another in which he sold 100,000 shares on August 4. Together with the latest transactions, he's sold 205,000 shares since August.

What is the current market value of Chuck Hastings' remaining direct equity stake?
After this latest sale, his direct ownership stands at 426,612 share, valued at approximately $14.8 million as of Friday's market close.

How does this transaction relate to recent price performance of Applied Digital Corporation?
The shares were sold at a weighted average price of approximately $35.22, while the stock closed at $34.66 on Friday. Shares are up a staggering 412.7% over the past year.

Company Overview

Company Snapshot

• Applied Digital provides digital infrastructure, data center hosting, and GPU-based cloud services for high-performance computing (HPC), artificial intelligence (AI), and crypto mining applications.
• The company generates revenue through infrastructure services for crypto mining customers, GPU computing solutions for AI and HPC workloads, and by designing, constructing, and managing data centers to support HPC applications.
• It serves technology companies, AI and machine learning firms, and cryptocurrency mining operators across North America.

Applied Digital Corporation operates at scale in the digital infrastructure market, focusing on high-performance computing and AI-driven workloads. The company leverages purpose-built data centers and advanced GPU resources to support demanding enterprise and crypto clients.

Foolish Take

Chuck Hastings’ recent insider sales mark a notable shift for his stake in Applied Digital, where he serves as a director. According to SEC filings, Hastings sold 75,000 shares of the AI data center firm last week across multiple open-market transactions valued at roughly $2.6 million. Combined with earlier August disposals—his first recorded sales—he has now sold 205,000 shares since the start of the quarter, reducing his direct stake by about nearly one-third.

The sales follow a period of explosive growth for Applied Digital, whose shares are up more than 400% over the past year as investors have piled into AI infrastructure plays. The company’s latest earnings report underscored that enthusiasm: Revenue surged 84% year over year to $64.2 million, buoyed by hyperscaler demand and an $11 billion lease pipeline with CoreWeave. Still, Applied remains unprofitable, with a $27.8 million GAAP loss and heavy stock-based compensation tied to its rapid expansion.

For long-term investors, Hastings’ trades don’t necessarily signal trouble—insiders often rebalance after sharp stock runs—but they highlight how lofty valuations and execution risk coexist in the AI infrastructure boom.

Glossary

Insider selling: When a company executive or director sells shares of their own company.
Open-market transaction: Buying or selling securities through public exchanges, not via private or pre-arranged deals.
SEC Form 4: A required filing disclosing insider trades by company officers, directors, or significant shareholders.
Weighted average purchase price: The average price per share, weighted by the number of shares bought or sold at each price.
Direct ownership: Shares held directly by an individual, not through trusts or indirect arrangements.
Disposition: The act of selling or otherwise transferring ownership of an asset or security.
Insider selling cadence: The frequency and pattern of share sales by company insiders over a period.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Non-GAAP: Financial measures not calculated according to Generally Accepted Accounting Principles, often used to show alternative performance metrics.
High-performance computing (HPC): The use of powerful computers and networks to process large amounts of data quickly.
GPU-based cloud services: Cloud computing services that use graphics processing units (GPUs) to accelerate complex computing tasks.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.