AppLovin stock declines sharply amid artificial intelligence competition concerns

AppLovin's share price has fallen 42% so far in 2026, after the stock doubled during 2025. Investors are worried that artificial intelligence could hurt the company's advertising business. AppLovin started as a mobile game maker but now earns most of its money from ad technology. In January alone, the stock dropped 30%. Part of that fall came after Google announced an AI tool for creating games, and another sharp drop followed a competitor's release of AI-powered mobile ad software. Short-sellers also attacked the stock, putting more pressure on its price. The central concern is whether AI will allow new competitors to enter the market and push down profit margins for established ad technology companies like AppLovin.