Zaid

For one, there are some legal clouds hanging over the company.

Some short sellers have accused Applovin of fueling growth through questionable advertising practices, specifically something called fingerprinting, which is a data collection technique that's been banned.

The SEC has now opened an investigation into the company, and Bloomberg confirmed in February that the investigation is still ongoing.

Now, Applovin denies any wrongdoing here, but when the SEC starts poking around, it makes investors nervous, leading to the sell-off in the stock price.

And overall, I think that Applovin's valuation got a bit too stretched.

The stock was trading under $40 at the start of 2024, but the value peaked at over $700 back in December of 2025.

So that raised expectations for the company, and despite the company beating estimates on their latest earnings report, the stock still fell.

So yeah, that's how Applovin ended up as the biggest loser in the S&P 500 for Q1 of 2026.

So what's my take on all of this?

Well, Q1 was ugly, but honestly, given all the uncertainty around the war and the Strait of Hormuz being closed, I'm kind of surprised that it wasn't worse.

And I think the reason for that might be because the fundamentals of the market are actually still pretty solid.

Analysts are expecting S&P 500 companies to grow earnings by 13% in Q1, which would be the sixth consecutive quarter of double-digit earnings growth.

We should find out pretty soon.

Earnings season is right around the corner, and these earnings could set the tone for Q2 and beyond.

I think if companies report strong numbers and give confidence guidance, despite all the macro and geopolitical uncertainty, that could give investors the confidence to get bullish again.

But look, if companies come back and start cutting forecasts because of oil prices or inflation or softer consumer demand, then we could be in for some more pain ahead.

For now, most Wall Street firms are still maintaining their bullish price targets from the start of the year.

Goldman Sachs has a year-end price target of $7,600.

The index is currently trading at 6,500.

So Goldman Sachs thinks that the index will rally nearly 20% from here.