AppLovin slides 12% to $449 as AI stocks lead broader selloff

AppLovin shares tumbled 12% on Monday, caught in a broad AI and semiconductor selloff that swept across the tech sector.

The Nasdaq Composite fell 1.6% as a broad AI selloff dragged AppLovin 11% lower to $449 on no company-specific news.

"I feel like some of the shift has gotten ahead of itself," Ben Fulton, CEO of WEBs Investments, said. "It's a range-bound market until you get a true solution in the Middle East."

The selloff swept across the semiconductor complex. Nvidia fell 3%, Broadcom dropped more than 3%, and Advanced Micro Devices slid 4%. SK Hynix's US-listed shares lost 8% following their Nasdaq debut Friday, while Micron Technology declined 5% and Seagate Technology fell 6%. The S&P 500 lost 0.8%, and the Dow Jones Industrial Average shed 133 points, or 0.3%.

The broader risk-off move coincided with President Donald Trump's announcement that the US was reinstating a blockade on Iranian shipping through the Strait of Hormuz, sending oil prices surging. West Texas Intermediate crude rose more than 8% to top $77 a barrel, while Brent advanced 9% to above $82. The geopolitical escalation added pressure on high-multiple AI names like AppLovin, which had already been vulnerable to profit-taking after rallying 46% over the past year.

Despite the sharp decline, AppLovin's fundamentals remain intact. The company reported first-quarter earnings per share of $3.56 on revenue of $1.84 billion, up 24% year over year, with an 85% adjusted EBITDA margin. The analyst price target of $654.60 implies significant upside from current levels, and the stock's put/call ratio of 0.93 suggests options positioning remains balanced rather than bearish.

The selloff in AI and semiconductor names comes ahead of a busy week for markets. The June consumer price index is due Tuesday, with economists expecting a year-over-year increase of 3.8%. Federal Reserve Chairman Kevin Warsh is also scheduled to testify before the House Financial Services Committee on the central bank's semiannual monetary policy report. Major bank earnings from JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Bank of America are on deck this week, along with results from Netflix, Johnson & Johnson, and UnitedHealth.

For AppLovin, the key question is whether the pullback represents a buying opportunity or the start of a deeper correction. High-beta AI names have historically snapped back quickly when sector-wide risk-off moves unwind, and the company's 85% EBITDA margin and $1 billion in buybacks provide a strong fundamental floor. Investors will watch Nvidia as the bellwether for the AI trade and the QQQ for broader tech sentiment in the sessions ahead.

This article is for informational purposes only and does not constitute investment advice.