What Happened?
Shares of mobile app technology company AppLovin (NASDAQ: APP) jumped 7.3% in the morning session after analysts viewed a sharp sell-off from the previous day, which was prompted by news of a regulatory probe, as an overreaction.
The stock's recovery followed a significant drop of about 14% during the last trading session after reports surfaced that the Securities and Exchange Commission (SEC) was investigating the company's data-collection practices. However, financial firms offered a more optimistic perspective on the situation. Citigroup recommended buying the shares, stating that the pullback priced in an "extreme" revenue impact. Similarly, Oppenheimer reiterated its "Outperform" rating on the stock. While acknowledging the potential for near-term price swings due to the investigation, the firm maintained its positive long-term outlook for the company.
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What Is The Market Telling Us
AppLovin’s shares are extremely volatile and have had 59 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 about 20 hours ago when the stock dropped 2.6% as a report surfaced that the U.S. Securities and Exchange Commission (SEC) was investigating the company's data-collection practices.
The probe reportedly reviewed allegations that the marketing platform company violated its platform partners' service agreements in order to deliver more targeted advertising to consumers. Following the news, which was first reported by Bloomberg, the stock became one of the worst-performing stocks in the S&P 500 and Nasdaq during the session. The investigation by the regulatory agency created uncertainty among investors regarding the company's business practices and potential future penalties.
AppLovin is up 84.1% since the beginning of the year, but at $629.16 per share, it is still trading 12.4% below its 52-week high of $718.54 from September 2025. Investors who bought $1,000 worth of AppLovin’s shares at the IPO in April 2021 would now be looking at an investment worth $9,651.
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