What Happened?

A number of stocks jumped in the pre-market session after a string of impressive earnings reports from industry leaders pointed to resilient growth. 

Leading the charge was Microsoft, which neared a $4 trillion valuation after reporting booming sales in its Azure cloud division and forecasting record spending. This positive momentum was echoed elsewhere in the sector. PTC Inc. shares jumped on a 24% revenue increase driven by its AI-powered portfolio and raised its full-year outlook. Similarly, F5 Networks and BigCommerce both surpassed analyst expectations for revenue and earnings. The optimism extended to ad-tech, where AppLovin gained on investor confidence in its AI-driven advertising solutions, showcasing broad strength in specific software niches.

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) jumped 3.1%. Is now the time to buy MongoDB? Access our full analysis report here, it’s free.
• Data Storage company Snowflake (NYSE: SNOW) jumped 3.3%. Is now the time to buy Snowflake? Access our full analysis report here, it’s free.
• Cloud Monitoring company Dynatrace (NYSE: DT) jumped 3.9%. Is now the time to buy Dynatrace? Access our full analysis report here, it’s free.
• Data Analytics company Domo (NASDAQ: DOMO) jumped 3.8%. Is now the time to buy Domo? Access our full analysis report here, it’s free.
• Advertising Software company AppLovin (NASDAQ: APP) jumped 6.6%. Is now the time to buy AppLovin? Access our full analysis report here, it’s free.

Zooming In On AppLovin (APP)

AppLovin’s shares are extremely volatile and have had 61 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 8 days ago when the stock gained 3.2% after a new trade agreement between the United States and Japan spurred a broad market rally. The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.

AppLovin is up 14.2% since the beginning of the year, but at $390.26 per share, it is still trading 23.5% below its 52-week high of $510.13 from February 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 $5,987.

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