Investors are concerned about the growing competition in the advertising sector.
In 2025, AppLovin's revenue amounted to $5.48 billion, which is 70% more compared to 2024. The net profit exceeded $1.5 billion (+111%). AppLovin expects further growth and projects that in the first quarter, it will earn $1.74 billion with an operating margin of 84%.
However, on February 12, after the release of the financial report, the stock price plummeted by almost 20% in a single day. Since then, it has slightly recovered and is currently trading at $377.8 per share. Nevertheless, this is still 48% below the December peak of $733.6.
As a result, the market 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 unlawful tracking of data from underage users. One firm, CapitalWatch, apologized in early February and withdrew its accusations of financial crimes against one of AppLovin's shareholders.
Furthermore, it's important to note that since October, AppLovin has been under investigation on suspicion of privacy violations in data collection.
Currently, investors are uneasy about the rising competition in the advertising field, including game-related advertising. This was influenced by the launch of the CloudX startup, founded by former employees of MoPub and Max, and the success of Unity Vector's advertising AI platform.
However, AppLovin's CEO Adam Foroughi is convinced that Axon platform has no competitors today. It is a suite of machine learning solutions designed to help optimize advertising campaigns and significantly boost ROAS. Today, Axon is the main growth driver for AppLovin, especially after selling its video game business.