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Luke Kawa8/6/25

AppLovin sinks as tepid top-line beat fails to impress

AppLovin, the company that reminds everyone of a character from “Superbad,” reported results that investors seemed to think were super bad at first blush. Shares initially tumbled in after-hours trading as the company’s top-line results only modestly exceeded expectations, as did management’s outlook for Q3, before reversing much of those losses.

Here are the numbers:

Revenues of $1.26 billion (compared to the consensus estimate of $1.25 billion and guidance for $1.195 billion to $1.215 billion).
Adjusted EBITDA of $1.02 billion (estimated $997.6 million, guidance for $970 million to $990 million).
Adjusted earnings per share of $2.39 (estimated $2.02).

For Q3, management called for revenues of $1.33 billion (plus or minus $10 million), with the Street looking for $1.3 billion. Adjusted EBITDA guidance for $1.08 billion (with the same range around it) was also above the consensus estimate of $1.05 billion.

Sometimes small beats can look disappointing in the eyes of investors in a world where everything related to AI seems to be crushing expectations. But no doubt about it: this puts a dent in what’s been a strong year so far for AppLovin. The company shook off short sellers’ reports that helped sink the stock with great earnings in Q1, and shares were up about 20% year to date heading into this release.

Bulls have praised the company’s heavy integration of AI, with UBS saying it uses LLMs to deploy code more than Meta or Alphabet. Earlier this year, Wedbush Securities also highlighted AppLovin as a key beneficiary of a court order banning Apple from collecting commissions on off-app purchases made in mobile games, saying that this will prompt more spending on ads to promote those very games.

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Tasha Matsumoto

Chip rout drags down stocks as investors rotate out of tech

Information technology and energy were today’s losers as oil prices slid on reports that Strait of Hormuz shipping traffic is normalizing.

Bear eating chips

Max Knoblauch1h

Airlines, cruise lines rise as oil prices ease

Travel stocks are climbing on Tuesday, with West Texas Intermediate crude futures down more than 3.4% as of 3 p.m., largely on traders’ hopes for an improving situation with Iran.

The New York Times reported that American officials believe Iran could agree to a 15-year suspension of uranium enrichment. Crude futures had spiked briefly on Tuesday following President Trump’s Truth Social post that the US must respond to the downing of a US Apache helicopter by Iran, but prices remain lower on the day, boosting US travel stocks.

Shares of airlines Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, and JetBlue were all up at least 4% an hour before market close. Cruise lines Carnival, Norwegian, and Royal Caribbean were similarly up. Travel companies have been rocked by higher fuel costs in the months since the war in Iran began.

markets

DraftKings soars after reporting $1.3 billion in trading volume on its prediction markets

It’s soccer summer, Knicks in five, baseball's back, and everyone watching the game is looking down at their phone. After launching a prediction market platform in December, DraftKings is ready to ride this wave. And on Tuesday, the traditional sports betting company announced it actually had something to show for it.

Consumer trading volume in the month of May grew 24% to $1.3 billion and total trading volume increased 34% to $3.1 billion according to a DraftKings SEC filing. Investors responded by lifting the stock 10% on Tuesday.

FanDuel parent company Flutter Entertainment was also trading higher.

Both sports betting companies reported upbeat earnings last quarter, beating Wall Street expectations, and are gaining over the past month following declines of 49% and 23% since January, respectively.

DraftKings and FanDuel have both struggled as Kalshi and Polymarket encroach on their customers. Sports betting has been key to the growth of prediction markets, making up 39% of total trading volume on Kalshi and 80% on Polymarket since July 2024 .

markets

Max Knoblauch3h

Rivian dips on R2 launch day as shoppers point out “out of control” lease prices

Rivian is sinking on Tuesday, the launch day of its highly anticipated R2 SUV.

The EV maker’s shares are down more than 7% on Tuesday afternoon, erasing a chunk of the gains they raked in during their recent 10-day winning streak.

Aside from a broad market sell-off and some selling the R2 launch news, online chatter also reveals some customer disappointment with lease prices for the new model. The performance trim lease prices are listed at $829 a month on Rivian’s site, close to the monthly price of the more expensive R1S. A Reddit post referred to those rates as “out of control” and “a huge disappointment.”

The R2 was announced as a lower-cost $45,000 SUV but is launching at higher-trim levels priced closer to $60,000. Rivian’s larger R1S starts at around $77,000. Rivian has implied annual R2 deliveries of between 20,000 and 25,000 units this year.

markets

Chip stocks and high-flying tech shares plunge, sending the Nasdaq, S&P 500 lower

Chip makers, artificial intelligence giants, and other highly-valued tech stocks plunged Tuesday, dragging major US stock indices deep into the red as the recent chip and AI complex comeback abruptly fizzled.

The Invesco QQQ Trust, which tracks the Nasdaq 100, is off around 3% on the day, and S&P 500 is down almost 2%.

The iShares Semiconductor ETF is also sinking, effectively giving up all the gains it saw yesterday as it surged to one of its best days of the year.

Wall Street initially opened in positive territory, but enthusiasm rapidly deteriorated midday as investors seemed to aggressively lock in profits on volatile, high-growth semiconductor stocks that, until recently, had been shooting upwards.

This pivot follows a brutal trading day last Friday when momentum stocks collided with a rosy jobs report, profit taking, and perhaps some very-belated pessimism triggered by disappointing guidance from Broadcom, sending a host of previously bid-up names falling.

Many of those same shares are tumbling on Tuesday:

Micron completely flipped its intraday trajectory, plummeting over 9% at one point after gaining in early morning trading. The memory provider has still more than tripled its valuation since the beginning of 2026. AMD shares also plummeted.
Marvell Technology jumped nearly 10% yesterday and advanced further soon after the opening bell, but reversed course midday and was down double-digits, on pace for its second-worst day this year. The company was recently selected to join the S&P 500 index effective June 22.
Intel is sinking after jumping in the yesterday's session on a report that Google and Nvidia are considering turning to the chipmaker as a backup supplier to TSMC.
Apple’s shares are selling down following the kickoff of its Worldwide Developers Conference (WWDC26) yesterday where it showcased the new AI-powered version of Siri and the trust and safety features of iOS 27.

The tech-driven slide overshadowed a positive macroeconomic buffer from the energy sector, with oil prices sliding. The relief in crude costs came after ongoing negotiations signaled that shipping traffic through the crucial Strait of Hormuz is normalizing according to Reuters, although this drop was tempered by a threat from President Trump to retaliate against Iran for an attack on a US helicopter in the Strait.

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