Why AppLovin Corporation (APP) Crashed on Thursday

We recently compiled a list of the 10 Stocks Mirror Wall Street Downturn. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against the other stocks.

Shares on Wall Street traded lower on Thursday, as investors moved to unload positions to mitigate risks from uncertainties brought about by key economic factors such as President Donald Trump’s continued tariff threats and policy shifts.

The Dow Jones dived by 1.01 percent, the S&P 500 declined 0.43 percent, while the tech-heavy Nasdaq lost 0.47 percent.

Ten companies also mirrored a broader market downturn, finishing the trading session in the red territory amid a flurry of catalysts dampening investor sentiment.

To come up with Thursday’s worst performers, we considered only the stocks with $2 billion in market capitalization and $5 million in daily trading volume.

A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.

AppLovin Corporation (NASDAQ:APP)

AppLovin Corporation (NASDAQ:APP) dropped its share prices for a third straight day, closing Thursday’s trading by 8.94 percent at $450.01 each, with analysts pointing to a blog post by Edwin Dorsey, criticizing what he touted as “low-quality” ads leading users astray.

In the blog post said to have more than 80,000 subscribers and voicing corporate misconduct, Dorsey said that APP’s rapid growth has been bolstered by “low-quality revenue growth” from advertisements that don’t give clickers what they expect.

The opinion piece came at a time when AppLovin Corporation (NASDAQ:APP) is enjoying surging valuations, even being one of the biggest gainers on a week-on-week basis last week, buoyed by impressive earnings performance for 2024.

In a statement, AppLovin Corporation (NASDAQ:APP) said net income last quarter expanded by 248 percent to $599 million from the $172 million registered in the same period a year earlier, as revenues grew 44 percent to $1.37 billion from $953 million year-on-year.

In full year 2024, net income soared 343 percent to $1.58 billion from $356 million year-on-year.

AppLovin Corporation (NASDAQ:APP) also expects revenues for the first quarter of the year to remain within the $1-billion level, and settle anywhere between $1.355 billion to $1.385 billion.

Overall APP ranks 8th on our list of Thursday’s top losers. While we acknowledge the potential of APP 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 APP 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.