Shares of Applied Digital Corporation (APLD +10.09%) were soaring higher this morning after the U.S. said it had reached a two-week ceasefire agreement with Iran. The news sparked a broader market rebound, and many tech stocks rose sharply as investors hoped the sector would avoid a prolonged slowdown.
Applied Digital stock was up by 12.3% of 12:08 p.m. ET.
Image source: Getty Images.
Why Applied Digital is far outpacing the market's gains today
While most stocks are rising on the ceasefire news today -- the S&P 500 is up by more than 2% -- Applied Digital investors may be particularly enthusiastic because there had been increasing pessimism in the market for AI stocks since the beginning of the year.
Investors started the year concerned that AI stocks may be too speculative, and then the war with Iran led many to believe an economic slowdown was brewing. That outlook came as economists raised their odds of a recession over the next 12 months, with some putting the likelihood as high as 48%.
And late last month, the Organization for Economic Cooperation and Development forecast that U.S. inflation would rise sharply to 4.2% in 2026 due to the Iran war. That's much higher than the Federal Reserve's estimate of 2.7%.
But with a ceasefire now underway, Applied Digital investors are now hoping that tech stocks may regain ground amid a potentially more stable economic environment.
NASDAQ: APLD
Key Data Points
More insights coming later today
Applied Digital will report its third-quarter results after the market closes today, and analysts' consensus estimates are for the company to have a loss of $0.13 per share and revenue of about $78.5 million. That represents a sales increase of about 48% from the year-ago quarter and narrowing losses from $0.16 per share in Q3 2025.
With the stock already surging higher today on the ceasefire news and the potential for more good news from the latest quarterly results later today, it's possible Applied Digital investors could have more to look forward to.
