Key Stats for AppLovin Stock
- Pre-market Price change for AppLovin stock: -5%
- $APP Share Price as of Feb. 11: $457
- 52-Week High: $746
- $APP Stock Price Target: $714
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What Happened?
AppLovin (APP) stock is down as much as 5% in pre-market trading despite reporting Q4 earnings that handily beat Wall Street expectations.
The mobile advertising company posted adjusted earnings of $3.48 per share on revenue of $1.66 billion, topping analyst estimates of $3.11 per share and $1.6 billion in revenue.
Revenue surged 66% year-over-year after accounting for a 2025 divestment, while adjusted EBITDA hit $1.4 billion with an eye-popping 84% margin.
The company also guided first-quarter revenue to $1.745 billion to $1.775 billion, above consensus expectations, while maintaining its exceptional 84% adjusted EBITDA margin.
So why did AppLovin stock fall? The answer lies in slowing revenue growth and mounting concerns about competition.
- The first-quarter guidance implies roughly 52% year-over-year revenue growth, a meaningful deceleration from the 66% growth posted in Q4.
- While 52% growth is still impressive, investors have grown accustomed to AppLovin’s blistering pace, and any slowdown triggers alarm bells.
- Analysts peppered CEO Adam Foroughi with questions about Meta Platforms potentially expanding its presence in AppLovin’s core mobile gaming advertising niche.
Meta recently announced it would bid more aggressively on in-game ad inventory, raising concerns that the social media giant could leverage its massive scale and audience data to steal market share.
Foroughi pushed back hard on these concerns, arguing that AppLovin’s AI-powered AXON 2 platform has a commanding technology lead that Meta can’t easily replicate.
“When I look at our internal dashboards, we are delivering the strongest operating performance in our history,” Foroughi said. “There is a real disconnect between market sentiment and the reality of our business.”
The CEO noted that AppLovin has successfully competed against large companies in mediation for years, and that increased competition in the MAX auction expands the overall pie rather than creating a zero-sum game.
When competitors win impressions that AppLovin values less highly, publishers make more money, and AppLovin still collects a 5% take rate.
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What the Market Is Telling Us About AppLovin Stock
The market’s negative reaction to AppLovin stock suggests investors are increasingly worried about multiple threats to the business model.
The company faces legal and regulatory headwinds, including an ongoing SEC investigation into data-collection practices and prior short-seller reports alleging violations of Apple and Google app-store policies.
More fundamentally, investors fear that AI could democratize game development to the point where AppLovin’s advertising platform loses value.
In January, Google’s Project Genie demo showed AI generating 3D game worlds with controllable characters, triggering a 17% drop in AppLovin stock on concerns that easier game creation would commoditize the market.
However, Foroughi argues the opposite: AI-generated content will create an explosion of games competing for attention, making discovery platforms like AppLovin’s even more valuable.
“When content becomes abundant, discovery becomes a scarce resource,” he said. “The winners will be the platforms that can efficiently match the right user to the right content at the right moment.”
On the e-commerce front, AppLovin is making solid progress expanding beyond gaming. The company opened its self-service advertising platform in Q4 on a referral-only basis and plans to launch to the general public in the first half of 2026.
Early results show strong engagement, with one Israeli cookware company scaling from $4 million to $16 million in revenue and now projecting $80 million this year, driven primarily by AppLovin’s platform.
The company is also seeing impressive unit economics on customer acquisition, with roughly 30-day payback periods when advertising its own platform on social media and search.
However, AppLovin is intentionally scaling these marketing efforts slowly until it improves onboarding tools and reduces the 43% of qualified leads that currently don’t go live.
Despite the after-hours decline, AppLovin stock delivered exceptional financial performance in 2025. Full-year revenue hit $5.48 billion (up 70%), adjusted EBITDA reached $4.51 billion (82% margin), and free cash flow totaled $3.95 billion.
The company returned $2.58 billion to shareholders through buybacks while growing revenue at a rapid pace.
The question is whether AppLovin can maintain this momentum as growth decelerates and competition intensifies. Management remains confident, but the market is clearly skeptical.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
