Hood River Trims Applied Digital Equity Holding

Hood River Capital Management LLC trimmed its holding in Applied Digital Corporation (NASDAQ:APLD), reducing the position by 812,377 shares, according to a Nov. 14 SEC filing.

What happened

Hood River Capital Management LLC reported selling 812,377 shares of Applied Digital Corporation (NASDAQ:APLD) during the third quarter, as disclosed in its Nov. 14 SEC Form 13F filing. The post-trade stake stands at 21,046,654 shares, worth $482.8 million as of Sept .30. The position, with a 5.7% weighting, remains the fund’s largest disclosed holding.

What else to know

Hood River sold a portion of its Applied Digital stake, now representing 5.7% of 13F assets under management after the trade.

Top holdings after the filing:

• NASDAQ:APLD: $482.8 million (5.7% of AUM)
• NYSE:MTZ: $350.4 million (4.1% of AUM)
• NASDAQ:KTOS: $246.1 million (2.9% of AUM)
• NASDAQ:DAVE: $215.5 million (2.5% of AUM)
• NYSE:FIX: $199.0 million (2.3% of AUM)

As of Nov. 13, shares of Applied Digital were priced at $23.06, up 221.6% over the past year.

Company overview

Company snapshot

Applied Digital Corporation operates in the technology infrastructure market, focusing on digital infrastructure for high-demand computing applications. Its strategy centers on supporting AI and HPC workloads through specialized data centers and cloud services.

Its digital infrastructure solutions include data center hosting, cloud services, and high-performance computing (HPC) hosting for AI and machine learning workloads.

The company generates revenue through infrastructure services for crypto mining, GPU computing solutions, and the design, construction, and management of data centers.

It has enterprise clients in the artificial intelligence, machine learning, and high-performance computing sectors across North America.

Foolish take

Hood River sold a small number of shares in the third quarter. Selling over 800,000 shares, the transaction represented 3.7% of its Applied Digital equity holding.

Notably, the stock remains its top equity holding, accounting for 5.7% of its assets under management reported in its 13F. The asset management firm will likely report its fourth-quarter equity holdings next month.

The stock has had a tremendous run, and the transaction could represent the fund booking a profit. Applied Digital's stock gained 231.4% over the last year, through Jan. 5. That dwarfed the S&P 500 index's 17.7% return, including dividends, and the Nasdaq Composite's 20%.

Applied Digital reported $64.2 million in revenue for the fiscal third quarter, up 84.3% year over year. It had an adjusted net loss from continuing operations of $0.03 compared to a $0.01 in the year-ago period.

Glossary

13F assets under management (AUM): The total value of securities a fund manager reports to the SEC on Form 13F.
Form 13F: A quarterly SEC filing by institutional investment managers disclosing their equity holdings.
Position weighting: The percentage a specific investment represents within a fund's total portfolio.
High-performance computing (HPC): The use of powerful computers and networks to process complex calculations at high speed.
Data center hosting: Providing physical space, power, and security for clients' servers and computing equipment.
Cloud services: On-demand access to computing resources and storage over the internet.
GPU computing: Using graphics processing units (GPUs) for tasks beyond graphics, such as AI or scientific calculations.
Artificial intelligence (AI): Computer systems designed to perform tasks that typically require human intelligence.
Machine learning: A subset of AI where computers learn from data to improve performance on specific tasks.
Market capitalization: The total market value of a company's outstanding shares.
Crypto mining: The process of validating cryptocurrency transactions and earning new coins using specialized computing power.
TTM: The 12-month period ending with the most recent quarterly report.

Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Comfort Systems USA and Kratos Defense & Security Solutions. The Motley Fool recommends MasTec. The Motley Fool has a disclosure policy.