"AppLovin ( ) shares have declined sharply in 2026, falling 42% year-to-date. This drop has been driven primarily by investor concerns that advancements in artificial intelligence (AI) could disrupt the advertising technology sector, particularly in mobile gaming ads. Fears center on competitors like Meta Platforms ( NASDAQ:META | META Price Prediction) potentially using AI to optimize their own ad systems more effectively, which could squeeze AppLovin's profit margins."
"These negative headlines overshadowed the company's otherwise strong financial performance and contributed to significant selling pressure. However, AppLovin delivered impressive results in the fourth quarter of 2025. Revenue increased 66% year-over-year to $1.66 billion, while adjusted EBITDA rose 82% to $1.4 billion, achieving an impressive 84% margin. In early February, CapitalWatch retracted key claims from its report, admitted inaccuracies, and issued a formal apology."
AppLovin shares plunged 42% year-to-date in 2026 as investors feared AI advancements could disrupt ad tech, especially mobile gaming advertising, enabling competitors like Meta to optimize ad systems and compress margins. A January short-seller report from CapitalWatch alleged ties between major shareholder Hao Tang and money laundering, intensifying selling pressure despite strong results. AppLovin reported Q4 2025 revenue of $1.66 billion, up 66% year-over-year, and adjusted EBITDA of $1.4 billion, up 82%, yielding an 84% margin. CapitalWatch retracted key claims, apologized, and a relief rally pushed the stock above $390. AppLovin's MAX mediation and in-app bidding provide resilient revenue share mechanics.
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