We recently compiled a list of the 10 Stocks Defy Market Optimism as Investor Caution Lingers. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against the other stocks.
The stock market stood its ground on Wednesday, with all major indices eking out gains as President Donald Trump softened trade restrictions for three large automakers, reviving hopes that the trade war may not be as bad as it seemed.
The Dow Jones grew 1.14 percent, the S&P 500 rose by 1.12 percent, while the tech-heavy Nasdaq jumped 1.46 percent.
On Wednesday, the White House granted three large automakers a one-month exemption from tariffs after a call with the president, sending their share prices higher during the session.
Ten firms, however, bucked an overall optimism, recording modest declines during the past trading session. In this article, we have listed the 10 names and detailed the reasons behind their performance.
To come up with Wednesday’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) decreased by 2.82 percent on Wednesday to finish at $318 apiece as investor sentiment was dampened by a potential class action lawsuit over allegations that APP created the false impression that its digital ad platform would more efficiently match advertisements to mobile games in addition to expanding into web-based marketing and e-commerce.
According to shareholder law firm Robbins Geller Rudman & Dow LLP in a statement on Wednesday, in truth, APP was exploiting advertising data from Meta Platforms and using manipulative practices that forced unwanted apps on customers via a “backdoor installation scheme” that inaccurately inflated installation numbers, and, in turn, its profit figures.
The law firm furthered that AppLovin Corporation (NASDAQ:APP) was utilizing manipulative practices to artificially inflate their own ad click-through and app download rates, such as by having ads click on themselves or utilizing design gimmicks to trigger forced shadow downloads, erroneously inflating installation numbers and, in turn, its profit figures, the complaint alleges.
Robbins Geller invited shareholders who lost money from their investment in AppLovin Corporation (NASDAQ:APP) to lead as plaintiffs in the class action lawsuit.
Overall APP ranks 9th on our list of Wednesday’s worst performers. While we acknowledge the potential of APP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APP but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.