Nasdaq Falls 5.5% to 24,315 as AI Stock Selloff Widens and AppLovin Jumps 31%

Key Facts

The Nasdaq Composite fell 1,421.52 points, or 5.5%, to 24,315 in Thursday’s session on November 5, in a selloff led by stocks tied to building AI data centers, according to the Associated Press. The decline spread to major U.S. stock indexes, with the S&P 500 losing about 4.4% and the Dow Jones 3.4%. The session followed a 1.4% rise in the Nasdaq the previous day, quickly reversing Wednesday’s gains. Amid the decline, AppLovin shares rose 31% after the company reported quarterly results that beat analysts’ expectations. The contrast between the stock’s performance and the broader market put the company’s results and next-quarter guidance in focus during the session.

The Associated Press said the selloff was concentrated in companies tied to building AI data centers, amid concerns that borrowing costs could slow construction of more such facilities. It added that elevated AI stock valuations and the possibility that some data-center projects could be put on hold heightened investor anxiety. The agency described the scene, saying that "a brutal sell-off swept Wall Street on Thursday, led by stocks tied to building AI data centers." Pressure extended beyond the Nasdaq: the S&P 500 lost 334.89 points to 7,353.73, and the Dow Jones fell 1,833.06 points to 51,523.06. The indexes’ declines reflected the selloff’s spread from technology companies to broader market sectors.

Thursday’s drop erased more than the market’s gains in the previous session, when the S&P 500 rose 1.6%, its best daily performance in three months, and the Nasdaq gained 1.4%, according to the Associated Press. The S&P 500’s decline on November 5 was its worst since the market turmoil tied to the "Liberation Day" tariffs in April 2025, the agency reported. For the trading week through Thursday’s close, the Nasdaq was down 1,122 points, or 4.4%. This trajectory underscores how quickly trading direction shifted between consecutive sessions, as concerns moved from financing AI expansion to the valuations of companies dependent on it. In this climate, AppLovin’s results beating analysts’ expectations did not prevent the selloff from weighing on the market as a whole.

AppLovin reported third-quarter results on November 4 for the period ended September 30, 2026, posting revenue of $2.185 billion, up 55% year over year, and net income of $1.439 billion, up 72%, according to its investor-relations release. Adjusted EBITDA was $1.842 billion, up 59% from the year-earlier period. The company also reported free cash flow of $1.4 billion and diluted earnings per share of $4.30. The Associated Press said revenue and earnings topped analysts’ expectations, linking that to the stock’s rise in Thursday’s session. The results came as stocks tied to AI infrastructure faced broad pressure over concerns about borrowing costs and spending on data centers.

AppLovin forecast fourth-quarter 2026 revenue of between $2.365 billion and $2.395 billion, and adjusted EBITDA of between $1.995 billion and $2.025 billion. The company estimated an adjusted EBITDA margin of between 84% and 85% for the same period. The guidance provides a framework for tracking the company’s performance after third-quarter revenue growth of 55% year over year. The board approved a $3.2 billion increase in its share-repurchase authorization, bringing the total potential value of the authorization to $3.6 billion at the end of October, according to the Associated Press. The agency said the program allows the company to buy back its shares and return capital to investors.

In other markets, Brent crude rose 3.9% to $98.29 a barrel on November 5, recovering part of its nearly 9% decline in the previous session, according to the Associated Press. The yield on the 10-year U.S. Treasury fell to 4.84% from 4.90% late Wednesday. The yield was at 4.95% on election night, after exceeding 5.30% in October, the agency reported. Moves in yields and oil provided a mixed backdrop for the stock session, which was dominated by concerns over financing AI infrastructure. AppLovin’s fourth-quarter guidance remains the next milestone cited in the company’s release for comparing its forecast with actual performance.