PomegraDraftKings Stock Plunges 21% as JFrog, AppLovin Soar on Earnings
Why did DraftKings stock plunge 21%?
DraftKings (DKNG) stock fell about 21% on Friday after the company cut its 2026 profit forecast to $175–$275 million, while JFrog and AppLovin jumped on strong results.
Key numbers
| DraftKings move (Fri) | -21%after 2026 profit cut (per [6]) |
|---|---|
| DraftKings 2026 adj. EBITDA guide | $175M–$275MPredictions spend $650–$700M |
| JFrog move (Fri) | +35%FY revenue guide $680–$682M (per [6]) |
| AppLovin Q3 revenue | $2.185B+55% YoY |
| Cloudflare Q3 revenue | $782.5M+39% YoY |
What happened
DraftKings (DKNG) stock fell about 21% on Friday after the company cut its 2026 profit forecast to $175–$275 million, while JFrog and AppLovin jumped on strong results. The new forecast for adjusted profit (EBITDA) is low because DraftKings plans to spend $650–$700 million on its new Predictions product. It also posted a third-quarter loss of 94 cents a share, versus 39 cents expected, and revenue of $1.33 billion, below the $1.40 billion expected. JFrog rose about 35% after raising its yearly forecast, AppLovin jumped 31% Thursday on 55% sales growth, and Cloudflare gained about 10% on 39% sales growth.
Why it matters
DraftKings shows how quickly investors punish a company that chooses to spend heavily now and earn much less this year. Predictions lets customers bet on real-world events, and DraftKings expects it to pay off later, but 2026 profit shrinks first. JFrog, AppLovin and Cloudflare show the opposite: investors are paying more for companies whose sales and forecasts both beat expectations.
Who this affects
- MarketmixedMedium impact
- Investors rewarded strong forecasts and punished a profit cut.
- CompanybearishHigh impact
- DraftKings shareholders lost about a fifth of their value.
- CompetitorsneutralLow impact
- No clear read-through yet for DraftKings' rival sportsbooks.
- IndustrybearishMedium impact
- DraftKings' push into prediction markets raises costs for online betting.
DraftKings vs Cloudflare, JFrog, AppLovin
How we got here
AppLovin reports record Q3 revenue of $2.185B, up 55%, and lifts its Q4 outlook.
AppLovin shares jump about 31% on record results and a larger buyback.
DraftKings, Cloudflare and JFrog report Q3 results after the market closes.
JFrog rises 35%, Cloudflare about 10%, DraftKings falls 21% in regular trading.
What to watch
- DraftKings' 2027 outlook: revenue $7.35–$7.75B and adjusted profit $800M–$1.0B.2027
- Whether DraftKings' $175–$225M Q4 Predictions spend builds customers as planned.Q4 2026
- Cloudflare's Q4 revenue versus its $845–$846M forecast.Q4 2026
Educational content only. Not investment advice.
More briefsAll briefs →
Chip Stocks Plunge 12% After Democrats' Midterm Wins
Nvidia (NVDA) fell 9% as Democrats' wins in data-center states fueled fears for the AI infrastructure buildout
10-Year Treasury Yield Rises to 4.86% on Rate-Hike Odds
The 10-year Treasury yield (US10Y) climbed as 165,000 new jobs made a December Fed rate hike more likely.
Taiex Jumps 5% After Short-Selling Curbs
Taiex (^TWII) rebounded as TSMC (2330.TW) climbed and Japan's Nikkei added 3.4% after a NT$500B rescue fund.