S-Curve Capital
Long/Short Portfolio Manager, TMT
AppLovin is probably stuck for a while after falling more than 50% this year, partly penalized unfairly for The Trade Desk's fall as a fellow black-box ad-tech name. Too few holders understood the business on the way up, which makes the way down painful. It may become a good long in 2027, pending more work on valuation. x.comÂ
AppLovin's ad yield engine has run out of gas, setting up the same structural decay that hit The Trade Desk as ad spend consolidates into walled gardens. Conversion rates stalling around 1.4%, delayed AI rollouts and mounting litigation point to a fundamental tailspin that Piper Sandler's cautious call understates. Being down 60% this year is not a bottom; buying here is catching a falling knife on a broken narrative. x.comÂ
Amazon is eating the advertising lunch of both The Trade Desk and AppLovin. The Trade Desk fell 20% after a massive earnings miss and another 15% the next day, with no recovery in sight, while AppLovin has dropped as well. x.com x.comÂ
AppLovin's selloff on lawsuit news is ridiculous and unwarranted, leaving a higher-risk, high-reward setup. Citi published a bullish report this morning, the average Street price target is around $525, and CEO Adam Foroughi looks top tier. The e-commerce side still needs more research. x.com x.comÂ
AppLovin's latest news is good news only for short sellers. x.com x.comÂ
AppLovin is in a dying, cutthroat business: mobile is not growing, and culturally people are tired of ads. x.com x.comÂ
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.comÂ
AppLovin could drop toward $200 if the current move does not turn into a quick liquidity sweep and rally, because sector sentiment matters more than fundamentals in the short term, even though AppLovin is fundamentally a beast. x.comÂ
The Trade Desk is vulnerable because Amazon has a comparable ad platform and a habit of ruthlessly eating competitors, a bigger concern than AI disruption. Its gross profit versus opex picture looks far weaker than AppLovin's, so its trajectory inspires much less confidence. x.comÂ
AppLovin is still a Moderate Buy, and for those with conviction in the thesis this is a good time to buy, though it will be a tough one to hold. Down 15% in a week, it could get stuck like Adobe for many quarters ahead. x.com x.comÂ
AppLovin is $200 cheaper and insiders still don't want to buy it. x.comÂ
