The stock of AppLovin (APP -6.26%) is getting hit with big sell-offs in Wednesday's trading. The ad tech company's share price was down 5.9% as of 1:15 p.m.
With AppLovin stock recovering after a decline, we assess its current status to decide on the best strategy for the future.
AppLovin (APP) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
Tech stocks have taken investors on a wild ride in 2025, with tariffs, interest-rate jitters, and a new presidential administration fueling market volatility. But while many are running for the exits, savvy investors know that short-term chaos can create long-term opportunity.
AppLovin's shares are undervalued due to a 50% drawdown, despite strong growth in its core in-game advertising business and promising expansion into e-commerce advertising. Three catalysts could drive a rerating: potential earnings surprise, a report refuting short-seller allegations, and the sale of the game studio business. AppLovin's Axon platform, leveraging AI for targeted advertising, has shown exceptional ROI for game developers and is gaining traction in e-commerce.
The Russell 1000 index includes 95% of U.S. equities by market value. YCharts screened that group to identify the best-performing stocks during the 12-month period that ended on March 31, 2025.
AppLovin Corporation NASDAQ: APP, a mobile marketing platform, has presented a contrasting image for tech sector investors. The company's share price soared past $500 after the announcement of outstanding full-year 2024 financial results in February 2025.
Recently, Zacks.com users have been paying close attention to AppLovin (APP). This makes it worthwhile to examine what the stock has in store.
After hitting an all-time high of $525.15 in February, AppLovin Corp.'s (NASDAQ: APP) share price tumbled more than 35% afterward, due to a pending class action lawsuit and to short seller reports.
AppLovin sold its Apps business for $900M, shifting focus entirely to high-margin ad-tech and AXON platform growth. Ad revenue hit $999M in Q4-24, accounting for 73% of total revenue, with a 78% adjusted EBITDA margin. The AI-driven AXON platform underpins expansion into non-gaming sectors, including e-commerce, with promising early campaign results.
AppLovin's expansion beyond gaming into ecommerce and other verticals validates its platform's broader applicability, positioning it to lead the digital ad ecosystem. The company's impressive financial performance in 2024, with significant growth in revenue, operating income, and margins, underscores its efficient scaling and value proposition. Despite competition from tech giants, AppLovin's focus on AI-driven self-service tools and incremental demand generation sets it apart in the digital ad space.
I reiterate a "Strong Buy" rating for AppLovin stock due to its robust fundamentals, favorable industry trends, and compelling stock valuation despite recent share price pullback. AppLovin's Q4 2024 earnings showed impressive 44% YoY revenue growth and exceptional EPS growth, with operating margins expanding from 28.4% to 44.4%. The company is well-positioned in the thriving mobile advertising market, especially in-app advertising, and is aggressively scaling its e-commerce advertising business.