Why AppLovin Stock Is Plummeting Today

By Josh Kohn-Lindquist | February 04, 2026, 3:21 PM

Key Points

AppLovin's awful start to 2026 only got worse today.
CloudX threatens to automate the mobile game ad industry by using LLM agents.
This new competition adds to the long list of headwinds AppLovin was already facing at the start of the year.
10 stocks we like better than AppLovin ›

Shares of leading adtech behemoth AppLovin (NASDAQ: APP) were down 16% as of 3 p.m. ET on Wednesday, extending the stock's 42% decline so far in 2026. AppLovin has battled an array of headwinds to start the year, but today's drop seems to stem from increased competition from AI-powered peers threatening to disrupt AppLovin's dominance in mobile gaming ad monetization. CloudX -- a start-up that looks to bring automation to the mobile gaming ad niche via LLM agents -- released its solutions to general availability on Wednesday, and the market worried about AppLovin's ability to stand a barrage of AI-powered competition.

AppLovin's awful 2026 (so far)

After its stock rose more than 5,000% in less than three years, AppLovin has seemingly faced pressure from all sides in 2026, stemming from events like:

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »

a short report from CapitalWatch, accusing AppLovin of playing a role in money laundering
Google's launch of Project Genie, which could democratize game development and potentially upend AppLovin's ad business
a sectorwide software sell-off, as the market weighs AI disruption potential
CloudX, specifically, put a name to this broader AI threat for AppLovin today
an ongoing SEC investigation into the company's data collection practices
other short reports in addition to CapitalWatch

Four white arrows point down against a red backdrop.

Image source: Getty Images.

That said, AppLovin sold its mobile gaming portfolio (not its mobile gaming ad business) in July of 2025, so the project Genie threat may prove to be a nothing-burger -- or even a tailwind with more games available to place ads on. Furthermore, while AppLovin faces these headwinds, it grew sales and net income by 72% and 128%, respectively, in the first three months of 2025, so these worries have yet to affect the financials. Trading at 40 times free cash flow and 28 times next year's earnings, the company's valuation has become reasonable following its dramatic sell-off at the start of the year. However, I personally won't be buying shares just yet, as I need more clarity from the stock regarding this long list of volatility-inducing headwinds. AppLovin reports earnings on Feb. 11, so we should get some valuable insights soon.

Should you buy stock in AppLovin right now?

Before you buy stock in AppLovin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AppLovin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $431,111!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,105,521!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 195% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of February 4, 2026.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Mentioned In This Article

APP

-16.12%

Applovin Corp

Latest News