Biotech2k
Biotech Investor, AI-Driven Drug Discovery
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
AppLovin is in a dying, cutthroat business: mobile is not growing, and culturally people are tired of ads. x.com x.comÂ
AppLovin does not need a multiple premium to work from here, but its growth has to hold up, and the market is becoming less certain of it. Apple is Google's and Meta's largest advertiser by revenue, a dynamic that can be extrapolated to AppLovin. Time and execution will decide. x.com x.comÂ
AppLovin needs a very clean quarter to rebuild confidence. Investors question how much market-share runway its gaming ad business has left and how sustainable its very high margins are, and last quarter's model-upgrade cadence issues raised new execution concerns. Gaming ads must remain the central growth engine, since e-commerce will not be big enough for a while. x.com x.comÂ
AppLovin is $200 cheaper and insiders still don't want to buy it. x.comÂ
AppLovin looks cheap at current levels unless something catastrophic is happening beneath the surface. Per @stock_analysisx, its EPS rose from $0.09 to $13 in four years while the stock is down 60% from its high at 15x forward earnings. Still, reaching its above-30% annual growth target through Axon recommendation-engine improvements alone seems unlikely. x.com x.comÂ
AppLovin's latest news is good news only for short sellers. x.com x.comÂ
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 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.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