The Appen Ltd (ASX: APX) share price is having a terrible start to the week.
In afternoon trade, the artificial intelligence data services company's shares are down a sizeable 15% to $5.60.
Why is the Appen share price crashing on Monday?
The Appen share price has come under pressure for a few reasons on Monday.
One is broad weakness in the tech sector following a poor finish to the week on the tech-focused Nasdaq index.
This has seen the S&P ASX All Technology Index (ASX: XTX) tumble 2.2% this afternoon.
What else?
It seems the weakness of Wall Street's Nasdaq index is having a negative impact on the Appen share price.
Investors were hitting the sell button on social media and advertising stocks on Friday night after Snapchat's owner Snap Inc (NYSE: SNAP), released a very disappointing update. Snap saw its shares crash almost 40%, Meta Platforms Inc (NASDAQ: META) (formerly Facebook) was down almost 8%, and Google's parent company Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) dropped almost 6%.
As Appen generates the majority of its revenue from these companies, their underperformance could ultimately have an impact on demand.
Anything else?
Finally, a note out of Citi could be weighing on sentiment and the Appen share price today.
While its analysts have retained their neutral rating and $6.60 price target, they have warned that the market is too optimistic on Appen ahead of its first-half earnings.
Citi highlights that the consensus estimate is for EBITDA of US$20.6 million. However, it believes that Appen will fall short of that and is forecasting EBITDA of US$19 million instead.
The broker also warned that there is a risk to Appen's guidance for a material increase in second-half revenue. This is due to weakness in digital advertising and Facebook's transition to a new artificial intelligence engine.
