TLDR
- APP stock fell ~9% on Thursday, extending a 35% year-to-date decline from a 52-week high of $745.
- Short sellers raised fresh concerns about market competition, adding pressure to an already fragile sentiment.
- CEO Adam Foroughi sold stock across 44 transactions on March 11-12; a director disposed of 130,000+ stock units days later.
- Q4 2025 results were strong: revenue of $1.66B (beat estimates), net income up 84% YoY, free cash flow of $3.95B for the full year.
- Macro headwinds including a potential U.S. recession and inflation projections of 4.2% are also dragging the stock lower.
AppLovin stock was down about 9% in Thursday trading, sitting near $396. There was no company-specific bad news to point to. The selling came from a mix of short-seller pressure and broader market anxiety.
Short sellers made fresh allegations around market competition and whether AppLovin’s AI-powered advertising platform can hold its edge. That narrative got louder this week after a wave of insider selling caught attention.
CEO Adam Foroughi sold stock across 44 separate transactions on March 11 and 12, at prices between $449 and $481. Director Eduardo Vivas then disposed of over 130,000 stock units on March 16, in the $446–$465 range. In the three months ending March 26, there were 155 insider transactions with almost no buying to offset the sales.
That pattern gave short sellers fresh material to work with, even as the underlying business kept performing.
The Numbers Tell a Different Story
AppLovin’s Q4 2025 results were hard to argue with. Revenue came in at $1.66 billion, beating estimates by 3.35%. Net income hit $1.1 billion, up 84% year over year. Adjusted EBITDA margin was 84%.
Free cash flow for Q4 alone was $1.31 billion. For the full year, that figure reached $3.95 billion — up 89% year over year. The company used $2.58 billion of that to buy back 6.4 million stock units in 2025.
Operating costs fell to just 23% of revenue in Q4, down from 37% a year earlier. That kind of margin expansion is rare.
CEO Foroughi pushed back on the bearish narrative during the Q4 earnings call: “When I look at our internal dashboards, we are delivering the strongest operating performance in our history.”
Analysts have largely stayed in the bull camp. Morgan Stanley holds an Overweight rating with an $800 price target. Goldman Sachs is Neutral at $710. Across the full coverage universe, there are 24 buy ratings, 3 holds, and just 1 sell. The consensus target sits at $648.
Macro Pressure Adding to the Pain
The macro backdrop isn’t helping. Investors are already on edge about the ongoing conflict in Iran, rising oil prices, and recession odds that economists say have increased materially.
A new OECD report released Thursday projected U.S. inflation could hit 4.2% this year — well above the Fed’s own estimate of 2.7% from last week.
APP has now dropped 35% year to date and is down 38% over the past six months. The stock peaked near $745 over the past 52 weeks.
For Q1 2026, AppLovin guided revenue of $1.745–$1.775 billion with adjusted EBITDA margins of 84%. Aggressive call option activity on the stock suggests more short-term volatility is likely.
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