Applied Digital Corp. (NASDAQ: APLD) stock rose nearly 6% in Thursday's premarket session after Wells Fargo initiated coverage with an Overweight rating and a $50 price forecast.
The broader market also provided support. Nasdaq futures climbed 1.59%, while S&P 500 futures gained 1.22%.
Wells Fargo analyst Eric Luebchow initiated coverage of Applied Digital with an Overweight rating and a $50 price forecast on Thursday.
The bullish call adds another potential catalyst for the artificial intelligence infrastructure company. Investors are also showing greater appetite for higher-beta technology stocks as index futures point to a stronger open.
Technical Analysis
Applied Digital remains in a technical repair phase despite Thursday's premarket gain.
The stock is 1.7% below its 20-day simple moving average of $26.32 and 7.3% below its 50-day SMA of $27.93. It also remains well below its 100-day SMA of $34.59 and 200-day SMA of $32.30.
That setup leaves the stock vulnerable to selling during rallies until it can reclaim key moving averages.
The broader trend also remains weak. The 20-day SMA is below the 50-day SMA. In addition, the 50-day SMA crossed below the 200-day SMA in August, forming a death cross.
The $29 level is an important resistance area. It sits close to the 50-day SMA and 50-day exponential moving average of $28.84.
Momentum also remains under pressure. The MACD is below its signal line, while the histogram is negative. That suggests buyers have yet to establish a sustained momentum shift.
Key resistance sits near $29, while support is around $24. The stock's 52-week low is $18.65.
Analyst Outlook
Applied Digital carries a Buy consensus rating with an average price forecast of $69.56 across 18 analysts. Forecasts range from $37.50 to $90.
Morgan Stanley maintained an Equal-Weight rating and raised its price forecast to $37.50 on Aug. 6. B. Riley Securities maintained a Buy rating and lifted its forecast to $75 on Aug. 3.
MarketDash Edge Rankings
Applied Digital has a weak Momentum score of 14.95 on the MarketDash Edge scorecard.
The reading reflects the stock's weak trend profile and its position below several key moving averages. Thursday's rebound could improve the setup, but the $29 resistance area remains an important level to watch.
ETF Exposure
Applied Digital is held by several thematic exchange-traded funds. The Global X Data Center & Digital Infrastructure ETF (NASDAQ: DTCR) has a 3.84% weighting, while the Global X Blockchain ETF (NASDAQ: BKCH) has a 3.90% weighting. The State Street Galaxy Hedged Digital Asset Ecosystem ETF (NASDAQ: HECO) has a 4.29% weighting.
Large inflows or outflows from these ETFs can create additional buying or selling pressure on Applied Digital shares.
Price Action
APLD Stock Price Activity: Applied Digital shares were up 5.66% at $25.77 in Thursday's premarket trading, according to market data.
