TLDR
- APP fell 13% to close around $442–$452, making it one of the S&P 500’s worst performers Monday.
- BofA data showed AppLovin added ~750 new e-commerce pixels in June, down from 950 in May.
- Merchant count hit ~8,300 but no clear lift has been seen since the platform opened June 22.
- BofA’s Dessouky cut 2026 revenue forecast by $130M and 2027 by $255M, assuming a slower ramp.
- APP has now fallen 18.56% over the past five trading days; Q2 earnings are due August 5.
AppLovin stock took a hard hit Monday, dropping 13% to close around $442–$452, ranking among the worst performers in the S&P 500. The sell-off extended the stock’s losing streak to five consecutive days, with a total decline of 18.56% over that period.
The trigger was a new Bank of America report from analyst Omar Dessouky, who flagged slower-than-expected growth in AppLovin’s e-commerce ad business.
Using third-party data from Store Leads, Dessouky noted AppLovin added roughly 750 new pixels in June, a step down from 950 in May. Merchant count reached about 8,300, but there’s been no clear jump in weekly data since the platform opened to all e-commerce advertisers on June 22.
In the first week after the broader launch, both installs and uninstalls rose — a sign advertisers were actively testing the system. But with only two weeks of data, Dessouky was cautious, saying it’s too early to call a trend.
The analyst also noted that early testers are unlikely to have generated meaningful revenue yet.
To attract smaller merchants who were previously locked out, AppLovin has been running brand awareness ads on YouTube and Meta. The company also launched a lead-buying product targeting high-value verticals like insurance and home services — areas that typically lean on Google and Meta for customer acquisition.
Dessouky pointed out that insurance is a high-LTV category where acquisition spend runs about 5x that of mobile gaming. That’s a big opportunity if the platform gains traction.
BofA Cuts Revenue Outlook
Despite maintaining a Buy rating and a $705 price target, Dessouky lowered his numbers. His 2026 revenue forecast was cut by $130 million, now assuming 15,000 general availability advertisers by year-end instead of the previous 20,000.
His 2027 revenue estimate was trimmed by $255 million, though the model still assumes 55,000 advertisers by end of that year.
Dessouky called AppLovin’s valuation “reasonable” at 17x 2027 EBITDA, and noted gaming can still grow more than 20% year over year. He did warn that near-term pressure could linger until clearer adoption signals show up.
The broader market didn’t help matters. The Nasdaq dropped 1.55% on Monday, with the S&P 500 off 0.79% and the Dow down 0.26%, as investors reacted to rising US-Iran tensions.
Q2 Earnings on Deck for August 5
AppLovin is due to report Q2 2026 results on August 5. The company has guided for revenue of $1.915 billion to $1.945 billion, implying 52% to 54% growth from the $1.259 billion reported in Q2 2025.
Adjusted EBITDA guidance stands at $1.615 billion to $1.645 billion, which would represent 58.6% to 61.6% growth year over year.
Wall Street overall remains bullish. APP holds a Strong Buy consensus on TipRanks, based on 20 Buy ratings and one Hold. The average price target of $666.32 implies roughly 50% upside from current levels.
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