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Technology & Semiconductor Equity Commentary
Liftoff Mobile looks very attractive as a business similar to AppLovin at roughly half the free-cash-flow multiple. It is also one of the purest AI application plays; outside coding, it is hard to find a more natural near-term AI beneficiary. Confusing adjustments and heavy pre-IPO debt may be hiding its true earning power, and the whole $437M IPO raise goes to cutting debt, with no large holders selling. It is more diversified than AppLovin, though AppLovin's growth and margins remain superior. x.com x.com x.com x.com x.com x.com
AppLovin is hated despite exceptional growth and profitability. In Q2 revenue grew 53% year over year with an 88.3% gross margin and a 77.7% operating margin. It also produced $869 million of free cash flow, a 100% FCF margin, and put $551 million of it into buybacks. x.com
AppLovin looks like an attractive ad-tech opportunity around $280 because its advertising platform has opened to all businesses, offering access to over 1 billion daily users, and management expects Q3 revenue above $2B. Shares are down nearly 62% from $733 despite Q2 revenue growth of 53% year over year. x.com
Liftoff Mobile looks like Blackstone-owned junk rebranded as an AI company for its IPO, the 2026 version of adding .com to a name in 1999. Shares are being offered through practically every retail broker. As in the dot-com era, everything rebranded as AI is being priced as if it will be a winner, yet touching AI does not make a company an AI company. x.com x.com
AppLovin's growth, liquidity, free cash flow and profitability make it the clear winner among beaten-down stocks with attractive fundamentals. Research Desk's chart shows EPS generally beating estimates, though the latest revenue missed. x.com
The market is badly wrong about AppLovin, which is down almost 60% over the past year while the business keeps growing. Revenue is up 52.8% year over year, the stock trades at 16x forward earnings, and the company is expanding beyond mobile gaming ads. x.com
AppLovin is a growth company priced like a value stock as its ecommerce business accelerates. AXON pixel growth rose from 1–3% week over week after the summer launch to 5.1% and then 11.7%, up 25% month over month, as a deliberately slow ramp let it tune models before the holidays. Revenue growth could reach 51–52% in 2026 and 35–40% in 2027, above sell-side estimates of 47.8% and 26.7%. On those numbers, with flat margins, it trades at 13.5x 2027 EPS. x.com
AppLovin's selloff prices in a significant slowdown while the underlying numbers remain incredible, making the risk/reward interesting. Q2 revenue rose 53% to $1.92B at an 84% adjusted EBITDA margin, and Q3 guidance implies 46-48% growth. It generates billions in free cash flow on a ~$100B market cap, has only ~$700M of net debt and buys back shares. Expanding into e-commerce could greatly enlarge its market; slower AI model gains and competition from Meta and Alphabet are the risks. x.com
AppLovin is a monster growth company trading at just 15 times forward earnings, while management expects it to grow much faster than the market expects. Per @stock_analysisx, its earnings per share went from $0.09 to $13 in four years, yet the stock is down 60% from its high. x.com
AppLovin's business has doubled while its stock has not. Shares are back at $309, the same as late 2024, when quarterly revenue was $999M; revenue is now $1.92B. The company is growing 53% with 66% net margins and generated $863M of free cash flow in a single quarter. x.com
AppLovin looks cheap for its growth, at just 15 times forward earnings after 61% growth over the last twelve months. More marketers have lately mentioned AppLovin as a place they want to spend, though the stock is a controversial pick. x.com