New York, Feb 23, 2026, 11:26 EST — Regular session
- AppLovin shares dropped, caught up in the wider slide hitting software and other fast-growth stocks.
- Tariff jitters and a new “worst-case” AI scenario note circulating among investors shaped sentiment.
AppLovin Corp (APP.O) shares slumped roughly 9% Monday, mirroring declines across software names. The stock dropped 9.2% to $380.23 by late morning, after starting at $401.63 and touching an intraday low of $376.78.
This wasn’t just about one company. Tech stocks dragged the broader U.S. market down, with traders reacting to fresh trade jitters. President Donald Trump rolled out a new 15% global tariff, just after the Supreme Court struck down the bulk of his previous tariffs. 1
Citrini Research’s scenario analysis seemed to hit a nerve. Dubbed a “dystopian” downside case for fast-moving AI, the note triggered a selloff in software and payments stocks while it made the rounds. The iShares Expanded Tech-Software Sector ETF (IGV) dropped around 5% as the report circulated. 2
It’s not just stocks feeling the pressure. Some software firms are holding off on new debt offerings, with lenders pushing for higher returns and stricter covenants. UBS credit strategist Matthew Mish put it this way: “We expect AI disruption risk to be increasingly reflected over 2026 to early 2027.” 3
AppLovin’s under a cloud of its own. The U.S. Securities and Exchange Commission’s investigation into the company remains “still active and ongoing,” Bloomberg News reported Friday. The SEC wouldn’t hand over documents related to the case, and up to now, neither AppLovin nor any of its executives face allegations of misconduct. 4
Sellers kept up the pressure even after a batch of strong numbers from AppLovin. The company topped Wall Street’s fourth-quarter sales forecasts and put out a first-quarter revenue outlook between $1.75 billion and $1.78 billion earlier this month. Still, it’s looking at fiercer competition for ad spending and feeling the squeeze from bigger players, with a shaky macro backdrop lingering over the sector. 5
Traders are eyeing whether Monday’s selloff sparks another stretch of de-risking in high-multiple software, or if dip buyers come back in after the broader market finds its footing.
But there’s risk on both sides here. Tariff headlines still sway markets, and if talk of AI “disruption” keeps spilling out of software and into ad tech, this group could see more markdowns. Another flare-up in regulation would only pile on fresh uncertainty.
Nvidia’s earnings are due out after the bell on Wednesday, Feb. 25, and the stakes are high. The market will be watching closely: this release is widely seen as a key gauge for AI momentum and could sway sentiment in software stocks that have swung wildly throughout February. 6
