12 Most Shorted Stocks in 2025

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1. Applied Digital Corporation (NASDAQ:APLD)

Number of Hedge Fund Holders: 42

Short % of Shares Outstanding (as of February 28): ~25.4%

Applied Digital Corporation (NASDAQ:APLD) is engaged in designing, developing, and operating digital infrastructure solutions and cloud services for the high-performance computing (HPC) and AI industries.  Analyst Kevin Dede from H.C. Wainwright reiterated a “Buy” rating on the company’s stock with the price target of $12.00. The rating is backed by several factors highlighting the company’s strong growth prospects. One major factor is Applied Digital Corporation (NASDAQ:APLD)’s recent financing deal with Macquarie Asset Management, says the analyst. The company has entered into a $5.0 billion perpetual preferred equity financing facility, with investment vehicles of funds managed by MAM, for its HPC business conducted via APLD HPC Holdings LLC.

The partnership validates Applied Digital Corporation (NASDAQ:APLD)’s business model and significantly reduces the capital requirements, enabling it to expand data center capacity efficiently. The analyst believes that the support from Macquarie can enhance Applied Digital Corporation (NASDAQ:APLD)’s credibility and help it secure major leases with hyperscalers, fueling the growth trajectory. The company’s emphasis on AI-enabled computing power remains in line with the elevated demand trends in the market. The company was one of the first companies to recognize the increased demand for power and data centers. Expecting the requirements, it started the construction of its facilities ahead of many hyperscalers, fully tapping the opportunities coming from the shifting demand landscape.

While we acknowledge the potential of APLD as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than APLD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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