AppLovin — The Best-Performing Tech Stock In 2024 — Is Down 40% Over The Past Month: What's Going On?

AppLovin Corp APP stock is under pressure again Tuesday, adding to losses of more than 40% over the past month. Here’s a look at what’s going on.

What Happened: AppLovin stock soared more than 700% last year on its way to becoming the best-performing tech stock of 2024. The rally was largely driven by impressive growth and consistently strong earnings.

The stock continued to see strong momentum to start 2025 and boomed to new highs in February after beating analyst estimates in the fourth quarter and issuing strong forward guidance on the back of strength from its AI advertising model.

The momentum quickly turned a week later when short seller The Bear Cave released a short report on the company, alleging fraud.

"The Bear Cave believes AppLovin’s rapid rise — up ~750% over the last year to around 35x revenue — is fueled by low-quality revenue growth from ads that are deceptive, predatory, and at times unreadable or unclickable," the short seller said in the report.

The Bear Cave went on to highlight multiple posts from different internet forums showing dissatisfaction with AppLovin's ad services, including multiple instances of former AppLovin customers alleging fraud.

Short sellers Fuzzy Panda and Culper Research also published short reports against the company just days later.

See Also: Short Seller Says Hesai Group Stock Is A ‘Chinese Scam’

AppLovin shares are down from around $525 a month ago to around $278.84 at market close Tuesday, according to Benzinga Pro. The continued weakness appears to be driven by concerns raised by short sellers.

It’s also worth noting that the broader market has sold off in recent weeks and some of the highest-flying stocks got hit the hardest as investors raced to lock in profits on momentum names. The S&P 500 officially entered correction territory last week amid new tariffs from the Trump administration and worries over a potential recession.

Needham analyst Bernie McTernan reiterated AppLovin with a Hold rating this week with shares still up about 315% over the past year. The Needham analyst believes the company stands to benefit from growing demand for in-app advertising.

APP Price Action: AppLovin shares were down 9.13% at $278.84 at market close Tuesday, according to Benzinga Pro.

Photo: Shutterstock.