Jay Woods of Freedom Capital Markets said volatility in AI infrastructure stocks is creating selective buying opportunities, particularly in smaller names like Applied Digital Corp. (NASDAQ:APLD).

Selloff Creates Entry Point In AI Infrastructure

Woods told CNBC on Wednesday that Applied Digital's sharp swings—down 52%, then up 90%, and recently off 20%—highlight its volatility but also its appeal for traders.

“…So this isn't for the faint of heart, but the traders are going to love this stock. Uh, you know, it is an—an AI infrastructure play,” Woods said.

He said the latest drop, partly tied to news around OpenAI, "gives investors an opportunity to buy the stock," framing it as a picks-and-shovels play in AI data centers.

Analysts Back Fundamentals Despite Volatility

Woods cited Freedom Capital analyst Paul Meeks, noting "he loves this stock," with "12 buys, no sells, average target $52," signaling strong fundamental support even amid price swings.

Woods said combining that outlook with technical levels strengthens the investment case.

Technical Setup Points To Upside Potential

Woods said the stock has pulled back to a support level around $31.30, calling it "a great area to accumulate shares."

He added that a move back toward $38–$40 could signal near-term upside, while a longer-term breakout could push shares into the low-to-mid $50 range, aligning with analyst targets.

Technical Analysis

Applied Digital is holding in the upper half of its 52-week range ($4.20 to $42.27), which keeps the longer-term trend bias pointed upward. The stock is trading 10.3% above its 20-day simple moving average (SMA) and 7.4% above its 100-day SMA, a combo that suggests buyers still control both the short-term and intermediate trend.

The moving average convergence divergence (MACD), a trend/momentum indicator, is above its signal line, and the histogram is positive, suggesting upside momentum is improving rather than fading. That matters here because the last major bullish MACD cross was in July 2025, and the current alignment suggests the bullish structure is still intact.

With a longer lens, the stock is up 616.74% over the past 12 months, signaling a powerful uptrend that can attract dip-buying on pullbacks. With support and resistance relatively tight near current levels, traders are treating the next break as a cue for whether momentum can extend.

  • Key Resistance: $35.00 — a level where rallies have recently struggled to push through.
  • Key Support: $32.50 — an area where buyers have tended to step in to defend the trend.

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the July 29, 2026 (estimated) earnings report.

  • EPS Estimate: Loss of 11 cents (Down from Loss of 3 cents YoY)
  • Revenue Estimate: $96.80 million (Up from $38.01 million YoY)
  • Valuation: P/E ratio not provided

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $45.71. Recent analyst moves include:

  • Needham: Buy (Maintains Target to $48.00) (April 28)

Top ETF Exposure

  • VanEck Digital Transformation ETF (NASDAQ:DAPP): 4.71% Weight
  • Bitwise Crypto Industry Innovators ETF (NYSE:BITQ): 5.90% Weight
  • CoinShares Bitcoin Mining ETF (NASDAQ:WGMI): 5.04% Weight

Significance: Because APLD carries such a heavy weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.

Price Action

APLD Price Action: Applied Digital shares were up 1.15% at $32.47 during premarket trading on Wednesday, according to Benzinga Pro data.

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