AppLovin Surges 71% as Lumentum Sinks 36% in a Turbulent Week for AI Stocks

AppLovin gained 71.22% while Lumentum lost 35.96% in a week that exposed enormous differences across the AI trade. Strong earnings lifted the advertising technology company, a proposed $115 billion takeover unsettled investors in optical networking, and fast-growing businesses including AMD and Palantir finished sharply lower.

The Nasdaq Composite dropped 3.4% over the week, despite recovering 1.1% on Friday. The S&P 500 lost 2.7%, according to Associated Press’s closing market figures.

Thursday’s sell-off reflected overlapping concerns about AI spending, financing costs and the political environment for data centers. Reuters reported that investors feared tougher AI regulation following the Democrats’ midterm election victory. Those concerns describe expectations about future policy, not an already enacted nationwide restriction on data-center construction.

But the weekly results resist a simple “AI stocks are falling” explanation. Amazon gained almost 8%, Dutch payments company Adyen rose nearly 9%, and AppLovin delivered the most dramatic advance among the companies in this selection.

AppLovin’s third-quarter earnings report showed revenue of $2.185 billion, up 55% from a year earlier. Net income increased 72% to $1.439 billion, producing a net profit margin of approximately 66%.

The company also generated around $1.4 billion in free cash flow. For the fourth quarter, it forecast revenue of between $2.365 billion and $2.395 billion.

That combination matters: AppLovin was not merely promising that rapid expansion would eventually produce cash. Its latest results showed substantial cash generation alongside growth.

The stock closed at $391.23 on Friday, up from $228.50 a week earlier. Its rally accelerated after Wednesday’s earnings release, with gains of 31.04% on Thursday and 9.87% on Friday, according to its historical closing prices.

Some of the weekly advance came before the report. The 71.22% figure is therefore a full-week return, not a one-day earnings reaction.

Nor does the rally establish that AppLovin is cheaply valued. A higher share price raises the level of future performance investors need to justify what they pay.

Marvell Technology and Lumentum provided the sharpest contrast.

The companies announced an all-stock acquisition agreement on November 2, giving Lumentum an implied enterprise value of approximately $115 billion. Lumentum shareholders would receive 4.5 Marvell shares for each share they own.

The strategic argument centers on the connections inside and between AI data centers. Marvell supplies semiconductor and networking technology; Lumentum contributes lasers and optical components that transmit data using light. The companies want to combine those capabilities as AI systems require faster, more tightly integrated connections.

Investors immediately marked down both stocks. Marvell fell 12.72% and Lumentum dropped 18.59% on Monday. Their full-week losses reached 28.14% and 35.96%, respectively, after further selling during the wider market rout.

The $115 billion headline is an announced valuation, not a guaranteed cash payment. With a fixed exchange ratio, the market value of the shares offered to Lumentum holders falls when Marvell’s stock declines.

The transaction also remains subject to shareholder and regulatory approvals. The companies expect it to close in the first half of 2028.

That leaves investors assessing two separate propositions: whether optical connectivity has attractive growth prospects, and whether this particular transaction creates value on these terms. Agreement with the first does not require agreement with the second.

AMD reported third-quarter revenue of $13.38 billion, up 45%. Data Center revenue rose 97% to approximately $8.55 billion, supported by server processors and AI accelerators. The company forecast roughly $17 billion in fourth-quarter revenue, with a range of plus or minus 3%.

Those results matter for the competition between Nvidia and AMD’s AI platforms. But they did not shield AMD’s shares from the subsequent sector-wide sell-off.

AMD finished the week down 11.05%. Crucially, however, the stock rose 1.01% on Wednesday, the first regular trading session after its earnings release. It then plunged 17.26% on Thursday before rebounding 11.04% on Friday.

Describing that entire weekly loss as investors rejecting AMD’s results would misrepresent the sequence.

Palantir’s quarterly filing showed revenue increasing 96% to $2.313 billion. U.S. commercial revenue grew 148%, reaching $984 million and exceeding U.S. government revenue for the first time.

Its stock fell 1.65% on Tuesday, following Monday evening’s report, and ended the week down 12.91%.

The distinction matters. These were different immediate earnings reactions, followed by exposure to the same turbulent market. Neither weekly share-price decline, by itself, demonstrates that demand for AI products has contracted.

The following selection compares regular closing prices on October 30 and November 6, 2026. Company names link to the historical price records used in the calculations.

Returns are calculated in each stock’s listing currency, excluding dividends, trading costs and currency conversion. Adyen uses its Amsterdam listing and SAP its Xetra listing; the remaining shares trade in U.S. dollars. European and U.S. markets close at different times, so Friday’s prices do not reflect exactly the same information window. This is a selected comparison, not an exhaustive ranking.

CoreWeave and Nebius lost 15.55% and 15.99%, respectively. The specialized AI cloud providers faced concerns extending beyond the size of their potential market.

On Thursday, Reuters, citing Bloomberg News, reported tighter Microsoft oversight of some data-center projects involving Nebius, IREN and Nscale. That report concerned scrutiny of projects, rather than a blanket cancellation of Microsoft’s demand for external computing capacity.

For an infrastructure provider, signing a customer is only part of the economic challenge. Capacity must become available on schedule, operate reliably and generate enough cash to cover equipment, power and financing costs. Delays can therefore matter even when underlying demand remains strong.

Europe offered a different contrast. Adyen’s 8.99% recovery still left it below its €944 closing price on October 27, before its sharp October 28 sell-off. SAP finished the week almost unchanged, down 0.24%.

Adyen is included as a broader technology comparison, not as evidence of an AI-driven rally. Likewise, SAP’s relative stability and Palantir’s decline make it difficult to describe the week as a straightforward shift from hardware into software.

For the Dutch semiconductor-equipment companies, AI Wereld has separately examined the divergence between ASML, Besi and the wider Amsterdam market in its Dutch-language coverage.

November 10: U.S. inflation. The Bureau of Labor Statistics calendar lists October’s Consumer Price Index release for 8:30 a.m. Eastern Time. Inflation data can change interest-rate expectations, making this an important release for capital-intensive businesses and the valuation of future earnings.

November 10: CoreWeave earnings. The company has scheduled its third-quarter results conference call for 5 p.m. Eastern Time. The useful questions extend beyond revenue growth: how much capacity is operational, how quickly contracted business converts into revenue, and what expansion requires in cash and financing.

November 12: Cisco earnings. Cisco will release its fiscal first-quarter 2027 results after the market closes, with a conference call at 4:30 p.m. Eastern Time. Watch for evidence of customer spending on AI networking and how that demand translates into orders, revenue and margins.

Together, these releases will test financing conditions, the execution of AI cloud projects and demand for the networks connecting AI systems: three different parts of the investment case that a single “AI boom” label cannot capture.

This article provides financial news and analysis, not personalized investment advice.