2024’s Top Tech Stock Plunges 22% as Short Sellers Target AI Claims
AppLovin was on top of the world until the floor fell out beneath it. The ad-tech darling — which soared over 700% in 2024 to become the Nasdaq-100’s best performer — tumbled 22% after two short-sellers took aim at the company’s AI advertising claims, alleging fraud and deceit. The dramatic decline wiped nearly $17B from AppLovin’s market value, resulting in the firm missing inclusion in America’s biggest index.
- Fuzzy Panda Research and Culper Research allege AppLovin’s AXON software isn’t the sophisticated AI platform it claims to be, instead accusing the business of using fraudulent tactics to inflate its online ad business.
- The short sellers’ reports came just days after AppLovin’s strong earnings announcement sent shares surging 34%, surpassing $500 for the first time — timing that CEO Adam Foroughi called “noteworthy” given the company’s quiet period restrictions.
Shorts vindicated: Analysts across the street have been largely dismissive of the short seller report — with BTIG calling the claims “almost meritless,” Piper Sandler maintaining a “buy” rating, and Wedbush deeming the claims “misguided” and reiterating an “outperform.” Investors, on the other hand, are weary of this once-favored name — especially with the stock’s recent wipeout. The shorts have had an impact on the S&P 500’s selection committee, too, as an appeal made by the short sellers seems to have caused the index committee to exclude the stock in its quarterly rebalancing.
