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A number of stocks fell in the afternoon session after investors rotated out of AI-linked high-flyers following underwhelming earnings updates from Oracle and Broadcom as the core thesis shifted from "growth at any cost" to "prove the returns."
Oracle triggered the alarm by missing revenue estimates while simultaneously hiking capital expenditures by $15 billion. This reignited fears that AI infrastructure spending is outpacing actual monetization. Broadcom compounded the anxiety; despite beating earnings, its stock fell as CFO Kirsten Spears cautioned that gross margins may come under pressure as product mix shifts further toward system-level AI sales. This sparked a macro rotation away from AI infrastructure and power plays.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
Applied Digital’s shares are extremely volatile and have had 90 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 2.6% on the news that investor concerns continued to mount over the risks tied to the company's rapid expansion strategy. The drop followed a decline in the previous session, showing ongoing unease about the company's direction. The market appeared to question if the fast buildout of data-center infrastructure could be sustained. While Applied Digital succeeded in growing its data-center capacity, this news was overshadowed by rising debt and market doubt. These factors seemed to fuel shaky investor confidence regarding the company's financial risks.
Applied Digital is up 256% since the beginning of the year, but at $27.79 per share, it is still trading 26.4% below its 52-week high of $37.76 from October 2025. Investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $92,809.
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