New York, Feb 4, 2026, 11:54 (ET) — Regular session
AppLovin Corp (NASDAQ:APP) shares dropped 13.7%, slipping to $398.51 in late-morning trading Wednesday. The stock swung sharply between $464.17 and a low of $384.24, after closing at $461.79 the previous session.
Investors are offloading shares in software and ad-related stocks following AI startup Anthropic’s launch of plug-ins for its Claude Cowork agent, which automates tasks in legal work, sales, marketing, and data analysis. “Sometimes the market just shoots first and asks questions later,” said Mike Archibald, a portfolio manager at AGF Investments, as the sell-off gathered pace Tuesday. (Reuters)
On Wednesday, analysts cautioned that the repricing might not be over, even as some pushed back against the panic. Mark Murphy of J.P. Morgan called it an “illogical leap” to move from early productivity tools to a full overhaul of core software stacks. Meanwhile, J.P. Morgan’s Toby Ogg said the sector is “being sentenced before trial.” The S&P 500 software and services index has dropped nearly 13% over five consecutive sessions and is down 26% from its October high, according to Reuters. (Reuters)
AppLovin faces pressure from how investors interpret AI’s impact on the mobile-gaming sector, a key source of its ad inventory. On Monday, Deutsche Bank noted in a report that AppLovin’s risk-reward profile—Wall Street’s way of weighing potential gains against losses—had “meaningfully improved” following a selloff sparked by Google’s Project Genie. This tech can create interactive 3D worlds from text or image prompts. Deutsche Bank cautioned it’s “far too early” to assess Genie’s disruptive potential and suggested that increased game production could actually benefit ad-driven firms like AppLovin. (Investing)
Shares of other names in the same trade also took a hit. Unity Software dropped 6.3% to $24.25, and Roblox dipped 2.5% to $63.75.
AppLovin isn’t in enterprise software, yet its stock has behaved like a high-beta play on the “AI changes everything” theme. When sentiment shifts to risk-off, ad-tech and app-monetization firms usually take a swift hit.
Valuation plays a role here as well. Jeremy Bowman of The Motley Fool pointed out in a Nasdaq.com column that AppLovin is still trading at a price-to-sales ratio near 31—a metric that contrasts market value with revenue—meaning any slip in guidance could hit hard. (Nasdaq)
AppLovin plans to release its Q4 and full-year 2025 earnings after U.S. markets close on Feb. 11. CEO Adam Foroughi and CFO Matthew Stumpf will discuss the results during a webcast at 5 p.m. ET. Investors are eager to see if ad demand remains steady, and to hear management’s take on how AI is impacting the mobile advertising space. (Applovin)
