What Happened?
A number of stocks fell in the afternoon session after President Trump threatened to increase import taxes on Chinese goods, reigniting trade war fears.
The threat was in response to China's move to restrict its exports of rare earth minerals, which are critical to high-tech manufacturing in the U.S. The unexpected announcement shattered a monthslong calm on Wall Street, sending major indices tumbling. The S&P 500 dropped around 1.3%, while the tech-heavy Nasdaq Composite fell 2.7%. Investors reacted by selling off stocks, particularly in the technology and retail sectors, amid concerns that escalating trade tensions could disrupt global supply chains and increase costs for companies.
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:
- Communications Platform company Twilio (NYSE: TWLO) fell 4.2%. Is now the time to buy Twilio? Access our full analysis report here, it’s free for active Edge members.
- Data Analytics company Palantir Technologies (NASDAQ: PLTR) fell 4%. Is now the time to buy Palantir Technologies? Access our full analysis report here, it’s free for active Edge members.
- Data Infrastructure company C3.ai (NYSE: AI) fell 4.2%. Is now the time to buy C3.ai? Access our full analysis report here, it’s free for active Edge members.
- Sales Software company ZoomInfo (NASDAQ: GTM) fell 4%. Is now the time to buy ZoomInfo? Access our full analysis report here, it’s free for active Edge members.
- Advertising Software company AppLovin (NASDAQ: APP) fell 4.4%. Is now the time to buy AppLovin? 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 60 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 3 days ago when the stock gained 7.3% on the news that analysts viewed a sharp sell-off from the previous day, which was prompted by news of a regulatory probe, as an overreaction.
The stock's recovery followed a significant drop of about 14% during the last trading session after reports surfaced that the Securities and Exchange Commission (SEC) was investigating the company's data-collection practices. However, financial firms offered a more optimistic perspective on the situation. Citigroup recommended buying the shares, stating that the pullback priced in an "extreme" revenue impact. Similarly, Oppenheimer reiterated its "Outperform" rating on the stock. While acknowledging the potential for near-term price swings due to the investigation, the firm maintained its positive long-term outlook for the company.
AppLovin is up 67.5% since the beginning of the year, but at $572.48 per share, it is still trading 20.3% below its 52-week high of $718.54 from September 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 $8,783.
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