What happened

Shares of Digital Turbine (APPS -2.25%) were sliding in July after a move by Alphabet's Google seemed to threaten the company. According to data from S&P Global Market Intelligence, the stock finished the month down 17%.

As you can see from the chart below, much of that slide came in the first few days of July.

APPS Chart

APPS data by YCharts

So what

Digital Turbine helps companies monetize mobile content, generally on apps. At the end of June, Google said that starting in August, it will require new apps published in the Google Play store to be published with the Android App Bundle, a move Digital Turbine had been preparing for since 2019.

Two coders in front of computers.

Image source: Getty Images.

Some investors seemed to believe the news would have a negative impact on Digital Turbine as the Android App Bundle was expected to complicate app redistribution for some distributors. However, Digital Turbine said in a blog post there would be no impact to its customers or its partners.

Digital Turbine's comments seemed to come in response to the stock falling sharply on the news as it pulled back 13% on July 2.

Now what

In a number of ways, Digital Turbine's sell-off is similar to what happened to The Trade Desk and other ad tech stocks back in March when those stocks dove on news that Google would ban third-party cookies. Though ad tech stocks fell sharply, The Trade Desk had already been preparing for such a move with Unified ID 2.0, showing the market was overreacting. Digital Turbine seems to have done the same thing here, but still received a similar market reaction.

Digital Turbine has been one of the brightest growth stories of the pandemic as revenue is expected to triple this year and the stock gained more than 2,000% at one point as the company rides the digital transformation and sharp growth in mobile ad tech. 

Based on management's own comments, the sell-off looks more like a buying opportunity for this high-growth tech stock.