Key Highlights

● Applied Digital traded at $19.41 at midday on October 29 with no company-specific news.

● Alphabet had its worst day since 2004 with negative free Cash Flow of $9.07 billion.

● AI-cloud names fell after Microsoft pointed to a lower capex commitment.

● Amazon kept its 2026 Capital spending plan of $220 billion.

Applied Digital (NASDAQ:APLD) had no company-specific news on Thursday, but the data-center developer slid as AI-infrastructure stocks retreated after Alphabet (NASDAQ:GOOGL)'s historic plunge revived worries about the cost of the AI buildout.

Moving with the pack

Applied Digital slid on Thursday, October 29, trading at $19.41 at midday, according to market data. The stock was one of the decliners in the Russell 2000 on a day when most small-cap stocks moved higher.

The same source cited no company-specific news. Applied Digital did not release results or announce new contracts. Instead, the stock moved with a broad retreat in AI-infrastructure names.

Alphabet sets the tone

The selloff in AI-linked stocks began with Alphabet. The Google parent suffered its worst day since its 2004 IPO, closing at $283.82 and erasing roughly $500 billion in market value, according to market data.

Its third-quarter Revenue of $127.58 billion missed the $128.22 billion consensus, and it reported negative free cash flow of $9.07 billion as capital spending hit $51.36 billion for the quarter, according to market data. Alphabet maintained 2026 capital spending guidance of $195 billion to $205 billion.

Media reports said the results "reignited concerns over mounting AI costs." One market analyst said that "markets are no longer rewarding companies simply for investing heavily in AI."

Microsoft adds to the questions

Microsoft (NASDAQ:MSFT)'s results were better received, with media reports citing "a big cash-flow beat." But for AI-cloud providers, one detail mattered. One source reported that AI-cloud names fell after Microsoft pointed to a lower capex commitment. Nebius Group (NASDAQ:NBIS) and CoreWeave (NASDAQ:CRWV) both slid, according to the same source.

That matters for Applied Digital, which builds and operates data centers designed for high-performance computing and AI workloads. Its Business depends on large technology companies and AI-cloud providers continuing to Lease capacity. Any sign that spending could slow, even at the margin, tends to weigh on the group.

The buildout narrative

Not everyone sees the buildout slowing. Vertiv (NYSE:VRT)'s chief executive said on October 28 that the industry is "in the middle of the largest infrastructure buildout," according to market data. Amazon (NASDAQ:AMZN) kept its 2026 capital spending plan of $220 billion when it reported after Thursday's close.

But investors are increasingly asking who pays for that buildout and when it generates returns. Amazon's trailing free cash flow turned deeply negative, and its shares fell sharply in after-hours trading. Intel (NASDAQ:INTC) also slid in extended trading on weak guidance, adding to the late-day pressure on technology.

A split session

The broader market reflected that tension. The Nasdaq Composite tumbled 365.13 points to 26,184.72, while the S&P 500 slipped 23.59 points to 7,720.39. Small caps rallied, with the Russell 2000 gaining 28.71 points to 2,859.22.

Investors rotated into health care, financials and real estate, according to market data. "There's plenty of other places to go with your money outside of the AI trade that have pretty decent prospects," one Investment strategist told media outlets. Applied Digital, a small-cap name closely tied to AI infrastructure, was caught on the wrong side of that move.

What to watch

Without company news, Applied Digital's direction will likely track sentiment toward AI infrastructure. Investors will watch for any updates on its tenant leases, construction timelines and financing, all of which matter for a capital-intensive data-center developer.

Signals from hyperscalers are key. Amazon's after-hours reaction and any further comments from Microsoft and Alphabet on spending could move the group. Rates matter too: the Fed's December 8–9 meeting and Friday's Employment Cost index could affect borrowing costs for companies building out large-scale data centers.