Since December, AppLovin's shares have nearly halved despite record profits
Investors are concerned about increasing competition in the advertising sector.
By the end of 2025, AppLovin's revenue reached $5.48 billion, which is a 70% increase compared to 2024. Net profit exceeded $1.5 billion (+111%). AppLovin expects further growth and forecasts earning $1.74 billion in the first quarter with an operating margin of 84%.
Nevertheless, on February 12, following the release of the financial report, shares dropped by nearly 20% in a single day. Since then, they have somewhat recovered and are currently trading at $377.8 each. However, this is still 48% below the December peak of $733.6.
As a result, capitalization fell from $244 billion in December 2025 to $132.6 billion.
Last year, AppLovin faced an attack from short-sellers. The company was accused of data theft, metric manipulation, and illegal tracking of data from underage users. One of the firms, CapitalWatch, apologized and withdrew the accusations of financial crimes made by one of AppLovin's shareholders in early February.
It is also worth noting that since October, AppLovin has been under investigation on suspicion of violating privacy in data collection.
Currently, investors are troubled by the increasing competition in the advertising sector, including game-related advertising. This has been influenced by the launch of the startup CloudX, founded by former members of MoPub and Max, and the success of the Unity Vector AI advertising platform.
AppLovin CEO Adam Foroughi, however, is convinced that the Axon platform has no competitors today. It is a comprehensive machine learning-based solution designed to help optimize advertising campaigns and significantly increase ROAS. Axon is currently the main growth driver for AppLovin, especially after selling its video game business.