Why AppLovin Corporation (APP) Declined on Wednesday

The stock market fell sharply anew on Wednesday, with all major indices ending in the red, as investor sentiment was dampened by Federal Chairman Jerome Powell’s bearish comments on the US economy, saying that the US’ tariff policies could drive up inflation and “move us further away from our goals.”

The tech-heavy Nasdaq dropped the hardest, down 3.07 percent. The S&P 500 declined by 2.24 percent, and the Dow Jones was down by 1.73 percent.

To come up with the list of the stocks that declined on Wednesday, we only considered the stocks with $2 billion market capitalization and $5 million trading volume.

AppLovin Corporation (NASDAQ:APP)

AppLovin Corporation (NASDAQ:APP) pulled back by 6.38 percent on Wednesday to close at $229.81 apiece as more shareholder law firms are urging investors to join an ongoing class action lawsuit against the company.

In separate statements on Wednesday, a new set of law firms reminded AppLovin Corporation (NASDAQ:APP) shareholders who lost money between May 10, 2023, and February 25, 2025, about the looming deadline to lead as plaintiff for the lawsuit.

According to the lawsuit, APP reported dishonest advertising practices and misleading statements about its business, operations, and prospects concerning financial growth and stability.

The complaint was based on a short seller report on February 26 claiming that AppLovin Corporation (NASDAQ:APP) was reverse engineering and exploiting advertising data from Meta Platforms.

The report further alleged that 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, their profit figures.

AppLovin Corporation (NASDAQ:APP) denied any wrongdoing and reassured investors of best practices. It said it had already hired a law firm to investigate the allegations.

Overall APP ranks 10th on our list of the stocks that declined on Wednesday. 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 time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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