AppLovin's stock plummets 38% in 2026 amid SEC probe and AI sector turbulence

AppLovin has faced a turbulent start to 2026, with its stock market price dropping by around 38% since January. The company, currently trading at about 323 euros per share, has been hit by regulatory scrutiny and market volatility. Recent developments include an SEC investigation into its advertising practices and mixed reactions to its latest financial results.

The company's shares suffered a sharp 9–10% decline on Monday alone, adding to a broader downturn this year. While AppLovin reported strong fourth-quarter 2025 results—revenue up 66% to $1.66 billion and an EBITDA margin of 84%—its stock market initially plunged by 20% after the earnings announcement on February 12. Investors also reacted to wider AI sector uncertainty, particularly after Nvidia's earnings report on February 25.

The SEC's investigation into AppLovin's advertising practices has further weighed on investor confidence. Unconfirmed rumours of a potential partnership with OpenAI have circulated but failed to stabilise the stock market. Meanwhile, the company has continued its expansion efforts, announcing the acquisition of health platform Eucalyptus for up to $1.15 billion to push into international markets.

In a separate case, another company in the same sector has also drawn SEC attention. Its shares have fallen nearly 53% since January, now trading at around $13.50, just above a 52-week low. The regulator is examining its disclosures about compounded semaglutide products, a key part of its weight-loss division. The company's first-quarter 2026 revenue forecast of $600–625 million missed analysts' expectations of roughly $654 million.

AppLovin's stock market remains under pressure due to regulatory concerns and market reactions to its financial performance. The SEC's ongoing investigation and broader sector instability have contributed to volatility. For the other company, weaker-than-expected revenue guidance and the SEC probe into its weight-loss products continue to drag its share price near yearly lows.