What Happened?
A number of stocks fell in the afternoon session after the 10-year Treasury yield climbed to 4.687%, the highest since January 2025, sharply increasing the discount rate the market applies to long-duration software revenue.
Ad-tech names like The Trade Desk, AppLovin, Magnite, and DoubleVerify earn high-margin subscription and take-rate revenue that's heavily weighted toward future years, exactly the kind of cash flow that gets crushed when rates rise. There's also a demand-side fear.
The U.S. conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, investors stop debating growth rates and start worrying about oil supply, inflation, and global stability. Advertisers are typically the first to pull back marketing budgets when consumer confidence wobbles.
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:
- Advertising Software company Zeta Global (NYSE: ZETA) fell 2.4%. Is now the time to buy Zeta Global? Access our full analysis report here, it’s free.
- Advertising Software company The Trade Desk (NASDAQ: TTD) fell 2.3%. Is now the time to buy The Trade Desk? Access our full analysis report here, it’s free.
- Advertising Software company AppLovin (NASDAQ: APP) fell 2.9%. 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 51 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 5 days ago when the stock gained 7.1% on the news that a robust earnings report and upgraded annual revenue forecast from networking giant Cisco Systems, fueled optimism in the software sector.
Cisco's impressive results were driven by strong demand from hyperscaler clients, the massive companies that dominate cloud computing, who are pouring capital into artificial intelligence infrastructure. This report was viewed by investors as a positive bellwether for the entire tech ecosystem.
The voracious appetite for AI is not only benefiting chipmakers but also the companies providing the essential networking hardware required to support these advanced systems. Cisco's performance reinforces the market narrative that the AI boom is generating substantial and sustained spending across the broader technology landscape, lifting investor sentiment sector-wide.
AppLovin is down 22.9% since the beginning of the year, and at $476.99 per share, it is trading 35% below its 52-week high of $733.60 from December 2025. Despite the year-to-date decline, investors who bought $1,000 worth of AppLovin’s shares 5 years ago would now be looking at an investment worth $7,383.
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