"Gaming-related stocks were punished on AI disruption fears. Applovin's stock fell on generalized fear over two new innovations in the mobile game world. Late last week, Alphabet unveiled Project Genie, an AI-powered tool that allows users to create virtual worlds. Second, a new AI-based digital advertising start-up, CloudX, became generally available, posing a potential competitive threat to Applovin's mobile game advertising engine."
"The weakness in gaming-related stocks began last Friday, the day after Google rolled out Project Genie to Google AI Ultra subscribers. Virtually all video gaming-related stocks fell in unison after the unveiling, and Applovin got caught up in the sell-off. The actual effect on video game developers is uncertain. Still, of course, Applovin doesn't make mobile games anymore, having sold its video game development business in June 2025 to focus on its digital advertising engine."
"While the Project Genie fear spilled over into this week, another potential competitive threat emerged on Wednesday: start-up CloudX. This digital programmatic ad company uses generative AI in place of engineers and operations teams to streamline ad auctions of the kind Applovin holds. CloudX founder Jim Payne was also interviewed by industry publication AdExchanger that same day, in which he outlined how CloudX can innovate digital ad auctions at scale, increasing trust and speed."
Applovin shares fell 14.9% through Friday as investors reacted to two new AI-driven developments. Alphabet unveiled Project Genie, an AI tool that can create virtual playable worlds, and Google rolled it out to Google AI Ultra subscribers. Separately, startup CloudX became generally available with a generative-AI programmatic ad platform that automates ad auctions. Applovin sold its game development arm in June 2025 to focus on its mobile advertising engine, raising concerns that Alphabet or CloudX could capture ad inventory or streamline auctions away from Applovin. Some analysts defended Applovin following the sell-off.
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