"Shares of AppLovin (NASDAQ: APP), the volatile, mobile game-focused adtech stock, were moving lower last month as the company faced another short-seller attack, software valuations came under scrutiny due to threats from AI, and Google unleashed a new platform for AI game creation, which was seen as a threat to gaming stocks. As a result, AppLovin stock fell sharply last month, closing January down 30%, according to data from S&P Global Market Intelligence."
"AppLovin entered 2026 after a blowout year, with the stock doubling in 2025 on the back of strong growth. However, that's led to doubts about its valuation, especially as software stocks endured a brutal sell-off last month, which seemed partly based on fears of AI and partly based on valuation. Even after last month's decline, AppLovin is trading at a price-to-sales ratio of 31."
AppLovin shares fell sharply in January, closing the month down about 30% after sustained selling pressure and the launch of Google's Project Genie. The company faced a short-seller attack on Jan. 20 alleging lapses in anti-money-laundering controls and other improprieties. Reports of an SEC investigation into data-collection practices added to investor concerns. AppLovin's stock doubled in 2025 on strong growth but now trades at a price-to-sales ratio near 31, prompting valuation worries amid a broader software sell-off driven partly by AI-related competitive fears. Analyst coverage remained mostly positive despite the decline.
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