AppLovin (APP) shares plummeted nearly 20% today as valuation and artificial intelligence (AI) disruption fears overshadowed the ad-tech firm’s exceptionally strong Q4 release. APP saw its revenue grow by 66% on a year-over-year basis to $1.66 billion in the fourth quarter, helping earnings come in at $3.24 a share, both miles ahead of Street estimates. More News from Barchart Still, AppLovin stock crashed on Thursday, bringing its total loss since mid-January to nearly 45%. This disconnect between op ...

Market Overview - U.S. stocks experienced a significant decline on February 12th, 2026, with the Dow Jones Industrial Average falling 1.03% to 49,605.19, the S&P 500 down 1.13% to 6,862.95, and the Nasdaq Composite dropping 1.61% to 22,695.23, driven by concerns over artificial intelligence's impact on corporate profits and anticipation of inflation data [1][2] Corporate Movers - Cisco Systems (CSCO) saw its stock drop approximately 10% despite exceeding earnings expectations, primarily due to disappointing forward guidance that raised growth concerns [3] - AppLovin (APP) experienced a dramatic sell-off, with shares tumbling around 18.3% despite reporting stronger-than-expected profits, reflecting market anxieties about AI disrupting software business models [4] - Micron Technology (MU) had a positive stock movement following optimistic comments from its CFO regarding next-generation HBM4 memory production, a key component for AI infrastructure [5] - McDonald's (MCD) shares rose after reporting stronger-than-anticipated profits, while Walmart (WMT) also performed well, contributing positively to the S&P 500 [6] - Tenet Healthcare Corporation (THC) surged after a strong earnings report, and T-Mobile US, Inc. (TMUS) rose after beating earnings estimates, while Shopify Inc. (SHOP) and Moderna, Inc. (MRNA) faced declines due to missing earnings expectations and FDA decisions, respectively [7] Sector Movements - In the energy sector, coal stocks like Peabody Energy (BTU) and Hallador Energy (HNRG) gained momentum following executive orders from the Trump administration aimed at supporting the coal industry [8] Economic Outlook - The upcoming U.S. Consumer Price Index (CPI) release is expected to significantly influence market direction, with investors closely monitoring it for signs of inflationary pressures, which will impact the Federal Reserve's interest rate decisions [9]

Core Viewpoint - AppLovin Corp is experiencing a significant stock price drop despite reporting strong quarterly performance and raising its outlook for 2026, indicating potential market volatility and investor sentiment challenges [2][3][6] Financial Performance - AppLovin reported a revenue of $1.66 billion for the fourth quarter, representing a 66% increase from the previous year and surpassing analyst expectations of $1.61 billion [3][6] - The company's market capitalization is approximately $131 billion, with a trading volume of 5,007,053 shares on the NASDAQ exchange [5] Stock Performance - The current stock price of AppLovin is $387.36, reflecting a decrease of 15.20% or $69.45, with fluctuations between a low of $383.19 and a high of $404.59 on the same day [4] - Over the past year, AppLovin's stock has reached a high of $745.61 and a low of $200.50, showcasing its volatility in the market [4] Analyst Ratings - Scotiabank maintains an "Outperform" rating for AppLovin and has raised its price target from $750 to $775, indicating strong confidence in the company's future performance [2][6]

Core Viewpoint - The market's negative reaction to Apploven's stock, despite strong earnings, is attributed to uncertainty about its business model and the broader software market slowdown [1][10][11]. Financial Performance - Apploven reported a revenue increase of 66% and an EBITDA growth of 82%, with gross margins at 84% [1][14]. - The company guided for sequential growth into a seasonally weaker quarter in Q1, which is unexpected for a company of its scale [2]. Market Perception - The market is questioning whether Apploven is merely a mobile gaming ad network or a more complex discovery infrastructure [3][4]. - Concerns exist that larger players like Meta may capture future profits in the AI economy, potentially compressing margins for Apploven [3]. Business Model Insights - Management is positioning Apploven as a discovery infrastructure rather than a traditional ad network, suggesting that competition could expand the overall market rather than diminish its value [5]. - The company is facing challenges in scaling its self-serve platform, with creative volume being identified as a bottleneck rather than demand [7][8]. Narrative and Communication - There is a narrative vacuum surrounding Apploven, leading to market skepticism about its long-term viability in the new AI economy [11][12]. - To regain market confidence, Apploven needs to provide more transparency about its business model and growth sustainability [15][16]. Short Reports and Market Sentiment - The volume of short reports targeting Apploven has created additional market noise, although the credibility of these reports is questioned [17][18]. - Despite the negative sentiment, there is potential for long-term opportunity if the company can address its narrative challenges [18].

Company Performance - Cisco (CSCO) reported solid earnings and guidance but saw its stock decline due to concerns over rising memory costs, which analysts believe are manageable given Cisco's strength in AI-related areas [5] - AppLovin (APP) also experienced a stock drop despite beating revenue and earnings estimates, guiding for Q1 revenue between $1.745 billion and $1.775 billion, exceeding the $1.7 billion estimate [5] - Rollins (ROL) was the largest decliner in the S&P 500 after missing both revenue and adjusted earnings estimates, attributing the shortfall to erratic weather patterns affecting seasonal work [6] Economic Indicators - Existing home sales fell by 8.4% in January to a seasonally adjusted annual rate of 3.91 million, below the consensus estimate of 4.2 million and down from 4.27 million in December [7] - The decline in home sales is being compared to lows seen during the Great Recession, with some analysts suggesting that the drop may be temporary and could reverse if mortgage rates decrease in the coming quarters [8] Market Trends - The S&P 500 has not shown significant gains this year, but there is a rotation away from last year's leading sectors, benefiting less trendy areas of the market [9] - The S&P 500 Machinery Index has increased by over 20% year to date, with companies like Cummins (CMI), Nordson (NDSN), PACCAR (PCAR), Caterpillar (CAT), and Parker-Hannifin (PH) receiving strong ratings [10]

Core Insights - AppLovin delivered a beat-and-raise quarter for the fourth quarter, with revenue and profits exceeding analyst expectations [1] - Management provided guidance for the upcoming quarter that is above Wall Street estimates [1] Financial Performance - Revenue and profits for the fourth quarter surpassed analyst expectations, indicating strong financial performance [1] Future Outlook - The guidance issued by management for the next quarter is optimistic, suggesting continued growth and performance above market expectations [1]

Core Insights - CEOs are expressing concerns about stock price volatility during earnings calls, which is unusual as these calls typically focus on company performance and strategy [1] Group 1: Company Insights - The company is recognized for its investment strategies, focusing on identifying attractive risk/reward opportunities that can generate alpha above the S&P 500 [1] - The investment approach combines price action analysis with fundamental analysis, avoiding overhyped stocks while targeting undervalued stocks with recovery potential [1] - The company runs an investing group that specializes in high-potential opportunities across various sectors, emphasizing growth stocks with solid fundamentals and turnaround potential [1] Group 2: Market Position - The company has a beneficial long position in META, indicating confidence in its future performance [1] - There is an indication of a potential new position in APP within the next 72 hours, suggesting active market engagement [2]

Core Insights - CEOs are expressing concerns about stock price volatility during earnings calls, which is unusual as these calls typically focus on company performance and strategy [1] Group 1: Company Insights - The company is recognized for its investment strategies, focusing on identifying attractive risk/reward opportunities that can generate alpha above the S&P 500 [1] - The investment approach combines price action analysis with fundamental analysis, avoiding overhyped stocks while targeting undervalued stocks with recovery potential [1] - The company runs an investing group that specializes in high-potential opportunities across various sectors, emphasizing growth stocks with solid fundamentals and turnaround potential [1] Group 2: Market Position - The company has a beneficial long position in META, indicating confidence in its future performance [1] - There is an indication of a potential new position in APP within the next 72 hours, suggesting active market engagement [2]

Core Insights - BAD BEAT Investing, led by Quad 7 Capital, has been providing investment opportunities for nearly 12 years, focusing on both long and short trades with a strategy that has been predominantly long since May 2020 [1] - The team consists of 7 analysts with diverse expertise in business, policy, economics, mathematics, game theory, and sciences, aiming to educate investors on trading proficiency [1] - The service emphasizes high-quality research, clear entry and exit targets, and offers various tools and resources for traders, including chat rooms and daily analyst summaries [1] Group 1 - BAD BEAT Investing is known for its significant market call in February 2020 to sell everything and go short, demonstrating a proactive approach to market conditions [1] - The investment strategy includes a focus on short- and medium-term investments, income generation, special situations, and momentum trades [1] - The service aims to save time for investors by providing in-depth research and actionable trade ideas each week [1] Group 2 - The benefits of BAD BEAT Investing include learning market dynamics, executing well-researched trade ideas, and access to extensive trading tools [1] - The company has a proven track record of success, indicating reliability in its investment strategies [1] - The analysts involved have personal investments in the equities discussed, aligning their interests with those of their clients [1]

Financial Performance - AppLovin Corp reported fourth-quarter revenue of $1.66 billion, exceeding analyst estimates of $1.60 billion [1] - The company achieved fourth-quarter earnings of $3.24 per share, surpassing analyst expectations of $2.95 per share [1] Future Guidance - For the first quarter, AppLovin expects revenue to be in the range of approximately $1.75 billion to $1.78 billion, compared to estimates of $1.69 billion [2] - The company anticipates first-quarter adjusted EBITDA to be approximately $1.47 billion to $1.50 billion [2] Market Reaction - Following the earnings announcement, AppLovin shares fell 7.3% to $423.55 in pre-market trading [2] - Analysts adjusted their price targets on AppLovin after the earnings report [2]