We recently compiled a list of the 12 Best Tech Stocks to Buy Right Now Under $10. In this article, we are going to take a look at where Applied Digital Corp. (NASDAQ:APLD) stands against the other tech stocks under $10.
Our list today highlights stocks that are priced under $10 and can offer opportunities for growth. These stocks offer diversification away from the typical large and mid-cap names with the use of lower capital. These stocks often belong to companies that are trying to create niche businesses or are in various stages of product evolution, including emerging growth firms and established businesses, giving tough competition to larger rivals. In our view, this space has the potential for high returns, particularly if these companies can successfully execute their business strategies and capitalize on market trends.
In the technology sector, many undervalued stocks are well-positioned to benefit from the ongoing trends of digital transformation, and transition to cloud and AI. Companies offering innovative software solutions, cybersecurity, and cloud services are anticipated to thrive as businesses continue to invest in technology to enhance their competitive position and security. By identifying promising companies in these areas, investors can potentially achieve good returns although with a little higher risk. That said, we believe that stock selection remains crucial in the small-cap space due to the volatility of these names. For comparison, the S&P SmallCap600 Index has underperformed the broader S&P500 Index over the last 3, 5, and 10 years which indicates that you might not get enough returns if you take a broader approach.
The technology sector continues to be driven by rapid innovation and the adoption of cutting-edge technologies. Advances in technology are significantly impacting lives, industries, and economies worldwide. The integration of AI and ML is revolutionizing workflows, enhancing productivity, and creating new revenue opportunities. Organizations globally are undergoing digital transformations to stay competitive, streamline operations, improve customer engagement, and drive innovation in their products and services.
Our Methodology
To shortlist the 12 Best Tech Stocks to Buy Right Now Under $10, we screened technology stocks with current share price below $10. We overlaid this criterion with additional criteria of market capitalization of at least $300 million and a potential upside of greater than 10%. The stocks were then arranged in ascending order of the number of hedge fund holders for each company, based on hedge fund data from Insider Monkey’s database.
Note: all pricing data is as of market close on February 6.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An overhead view of a large-scale data center with rows of servers and blinking lights.
Applied Digital Corp. (NASDAQ:APLD)
Current Market Price: $7.88; Upside Potential: 40%
Number of hedge funds: 26
Applied Digital Corp. (NASDAQ:APLD) is a niche player in the data center space, engaged in designing, developing, and operating cutting-edge digital infrastructure throughout North America. Originally a crypto miner, the company terminated mining operations in March 2022 and transitioned to offering digital infrastructure solutions and cloud services to the fast-growing sectors of High-Performance Computing (HPC) and AI.
For the fiscal year ended May 2024, Applied Digital Corp. (NASDAQ:APLD) generated the majority of its revenue (~85%) from its Data Center Hosting (DCH) business, which provides infrastructure services to crypto mining customers, allowing them to rent space based on their power requirements. During the same period, its Cloud Services (CS) business, which provides high-performance computing power for AI and ML applications, commanded 17% of total revenue. By Q2 2025 (November 2024), the revenue mix had substantially improved, with CS revenue witnessing a 523% year-on-year growth.
In addition to these established businesses, Applied Digital Corp. (NASDAQ:APLD) is ramping up its HPC Data Center Hosting business, aimed at designing, building, and operating next-generation data centers for hyperscalers. The company already has a 100 MW HPC facility under construction in Ellendale, North Dakota. To support its growth initiatives, Applied Digital entered into a partnership with Macquarie Asset Management for funding of up to $5.0 billion to support the full 400 MW build-out of the Ellendale HPC Campus.
This is a significant step in Applied Digital Corp. (NASDAQ:APLD)’s growth trajectory, as highlighted by Wes Cummins, Chairman and CEO of Applied Digital:
“We believe this expanded relationship with MAM positions Applied Digital for significant growth in the industry, establishing Applied Digital as one of the fastest-growing HPC data center owners, operators and developers in the United States. At today’s build costs, we will have a significant portion of the equity needed to construct over 2.0 GW of HPC data center capacity, including our Ellendale HPC Campus.”
Overall APLD ranks 4th on our list of the best tech stocks to buy under $10. While we acknowledge the potential of APLD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
