What Happened?
A number of stocks fell in the afternoon session after the technology sector retreated in the intraday session as investors began to lock in profits following a historic rally that recently pushed the market to all-time highs.
The S&P 500 and Nasdaq were under pressure as the dominant artificial intelligence trade cooled off. Notable names like Nvidia were down as traders locked in profits following a banner year where the Nasdaq surged over 20%. With the S&P 500 recently hitting intraday highs near 6,945, this dip reflected a shift in internal momentum rather than a response to major economic news.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Data Storage company MongoDB (NASDAQ: MDB) fell 2.9%. Is now the time to buy MongoDB? Access our full analysis report here, it’s free for active Edge members.
- Advertising Software company AppLovin (NASDAQ: APP) fell 3.5%. Is now the time to buy AppLovin? Access our full analysis report here, it’s free for active Edge members.
- Automation Software company SoundHound AI (NASDAQ: SOUN) fell 2.8%. Is now the time to buy SoundHound AI? Access our full analysis report here, it’s free for active Edge members.
Zooming In On AppLovin (APP)
AppLovin’s shares are extremely volatile and have had 58 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 3.7% on the news that investor optimism around artificial intelligence fueled broad market gains. Technology stocks with a focus on artificial intelligence once again led the market higher, boosting the Nasdaq and S&P 500. Companies at the forefront of the AI boom, such as Nvidia and Broadcom, saw significant jumps in their share prices. The rally reflected a renewed belief among investors in the transformative potential of AI technology to drive future growth and productivity. The rally was further supported by a surprise cooling in the November consumer price index (CPI) report, which triggered market pricing for additional rate cuts in the coming year. This created a more favorable environment for growth-oriented software companies as borrowing costs decrease.
AppLovin is up 104% since the beginning of the year, and at $697.54 per share, it is trading close to its 52-week high of $733.60 from December 2025. Investors who bought $1,000 worth of AppLovin’s shares at the IPO in April 2021 would now be looking at an investment worth $10,698.
Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report.
