"Shares of AppLovin (NASDAQ: APP) were heading lower today in an apparent response to Google's Project Genie, a new prototype from Google DeepMind that allows users to create virtual worlds for gaming with AI. The news sparked a sell-off among gaming stocks as Unity Software, Take-Two Interactive Software, and Roblox all fell sharply on the news. Applovin stock was down 11.7% as of 1:13 p.m. ET."
"The sell-off in AppLovin seems surprising because the company isn't a game developer anymore. It sold that part of its business last year as its adtech platform began to take off. Much of its business still relates to mobile games, but it's monetizing that through advertising, rather than game sales and fees. It's unclear if Project Genie will be disruptive to the mobile gaming industry, but it could potentially be a tailwind for AppLovin if it opens up new ad inventory in mobile gaming."
"AppLovin stock could also be facing pressure from a broader sell-off in software stocks, which has continued as the fast-growing adtech stock trades at a lofty price-to-sales ratio of 31 even after today's decline. The company will get a chance to redirect the narrative when it reports fourth-quarter earnings on Feb. 11. Analysts are expecting revenue, which includes a headwind from the sales of the apps business, to grow 17.4% to $1.61 billion, and for ad"
Google released Project Genie, a DeepMind prototype that uses AI to let users create virtual gaming worlds in VR. The announcement triggered a sell-off across gaming-related stocks, including Unity, Take-Two, and Roblox, and knocked AppLovin shares down about 11.7% intraday. AppLovin sold its game development unit last year and now operates as a pure-play adtech company that monetizes mobile gaming through advertising rather than game sales. Project Genie’s potential to expand mobile gaming ad inventory could benefit AppLovin, though its disruptive impact on mobile gaming remains unclear. AppLovin faces valuation pressure with a price-to-sales ratio near 31 and reports earnings on Feb. 11.
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