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- Must Reads: AppLovin - Buy, Hold, or Sell Before Earnings?
Must Reads: AppLovin - Buy, Hold, or Sell Before Earnings?
Decoding AppLovin's Growth Potential, Valuation Concerns, and the Stakes for Its Upcoming Q1 2025 Earnings
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Welcome, Investors!
In a choppy 2025 tech market, finding true growth stories feels like panning for gold in stormy waters. Apple’s sliding. Meta’s retracing. The Nasdaq’s down double digits. But there’s one name I’ve been watching that refuses to follow the crowd: AppLovin $APP ( ▲ 10.05% ).
This isn’t just another gaming pivot story—it’s a deep transformation into a high-margin AI-powered ad tech platform. The stock has pulled back 22% in the last three months, but under the surface? The fundamentals are telling a different story.
In this newsletter, I’m digging into:
📊 AppLovin’s Reinvention – A $900 million gaming divestiture, 44% YoY revenue growth, and a laser focus on AI-driven ad technology—this company is thinking big.
💡 The Efficiency Machine – $3 million in adjusted EBITDA per employee. You read that right. AppLovin isn’t just scaling—it’s squeezing serious profits out of every dollar spent.
⚠️ Valuation & Volatility – At nearly 38x forward earnings, investors are paying a premium. And in a market with tight budgets and tightening expectations, that’s a risk.
🔍 Smart Money Watch – Hedge funds are circling, but Cathie Wood is rotating elsewhere. What does that say about near-term upside?
This isn't just about ads—it’s about automation, margins, and where software meets scalability. I’m not here to sugarcoat: the valuation is rich, the expectations are sky-high, and the risks are real. But the opportunity? Still massive—if the company delivers.
If you're already holding APP, this may be a "wait and monitor" zone. If you're eyeing a fresh entry? The coming earnings could be your signal.
Let’s break it down and make smarter, more confident investing decisions—together. 🚀📈
Erwin Dwight
Founder of Investing Wise Academy
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