What happened?
A number of stocks fell in the afternoon session after underwhelming earnings reports from tech giants Amazon and Intel (after mediocre earnings reports from Alphabet and ServiceNow the previous day) sparked widespread investor anxiety regarding aggressive artificial intelligence spending and sustained cash burn.
As reported by CNBC, disappointing quarterly reports from both companies triggered a broad slide across technology equities and hardware suppliers, overshadowing positive momentum in other areas of the market. Investors grew increasingly wary of the sector's rising capital expenditures—the funds poured into long-term assets such as data centers and computing hardware.
With both firms spending heavily to build out artificial intelligence infrastructure, market participants are questioning when these massive investments will translate into meaningful revenue and profit growth per CNBC. The steep drops in Amazon and Intel weighed heavily on market indices, showing how vulnerabilities among dominant technology leaders can rapidly dampen confidence across the broader industry.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Advertising software company AppLovin (NASDAQ:APP) fell 8.4%. Is now the time to buy AppLovin? Access our full analysis report here, it’s free.
- Video conferencing company 8x8 (NASDAQ:EGHT) fell 6.2%. Is now the time to buy 8x8? Access our full analysis report here, it’s free.
- Data infrastructure company Elastic (NYSE:ESTC) fell 5.9%. Is now the time to buy Elastic? Access our full analysis report here, it’s free.
- E-commerce software company Shopify (NASDAQ:SHOP) fell 6.8%. Is now the time to buy Shopify? Access our full analysis report here, it’s free.
- Content delivery company F5 (NASDAQ:FFIV) fell 6.6%. Is now the time to buy F5? Access our full analysis report here, it’s free.
Zooming in on AppLovin (APP)
AppLovin’s shares are extremely volatile and have had 53 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 5.2% on the news that software-as-a-service and broader technology equities rebounded as falling Treasury yields attracted dip-buyers back into the market following a sharp, AI-driven sell-off in previous sessions. As reported by CNBC, major equity averages—including the tech-heavy Nasdaq—moved higher as market sentiment stabilized and capital rotated back into quality software.
In the previous session, CNBC noted that shares across the artificial intelligence and broader technology space had faced heightened selling pressure, rattling investor confidence regarding near-term monetization and the heavy debt burdens funding the AI sector. However, CNBC observed that this pullback proved short-lived as dip-buyers re-entered the market, viewing the sector's valuation reset as an attractive entry point for companies with fortress balance sheets.
AppLovin is down 62.4% since the beginning of the year, and at $232.79 per share, it is trading 68.3% below its 52-week high of $733.60 from December 2025. Despite the year-to-date decline, investors who bought $1,000 worth of AppLovin’s shares 5 years ago would now be looking at an investment worth $2,340.
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