Investors are worried about increasing competition in the advertising sector.
By the end of 2025, AppLovin's revenue reached $5.48 billion, marking a 70% increase compared to 2024. Net profit exceeded $1.5 billion (+111%). AppLovin anticipates further growth and forecasts earning $1.74 billion in the first quarter with an operating margin of 84%.
Nonetheless, on February 12th, following the release of the financial report, shares plummeted nearly 20% in a single day. Since then, they have somewhat recovered and are currently trading at $377.8 per share, still 48% below the December peak of $733.6.
As a result, the market capitalization fell from $244 million in December 2025 to $132.6 billion.
Last year, AppLovin faced an attack by short sellers. The company was accused of data theft, metric manipulation, and illegal tracking of minor users' data. One firm, CapitalWatch, apologized in early February and withdrew allegations of financial crimes against one of AppLovin’s shareholders.
Additionally, since October, AppLovin has been under investigation for suspected privacy violations in data collection.
Currently, investors are concerned about rising competition in the advertising space, including that related to gaming. This was influenced by the launch of the startup CloudX, founded by former members of MoPub and Max, and the success of Unity Vector's advertising AI platform.
AppLovin CEO Adam Foroughi, however, is confident that the Axon platform has no competitors today. Axon offers machine learning solutions designed to optimize advertising campaigns and significantly boost ROAS. Currently, Axon is the primary growth driver for AppLovin, especially after the sale of their video game business.