AppLovin (NASDAQ: APP), a leading force in mobile advertising and AI-driven app monetization, is under intense investor scrutiny as short-seller reports shake confidence in the stock’s recent rally. Despite a stunning 240% surge over the past year, the company now faces tough questions about the sustainability of its business model.
Recently, short-seller firms Fuzzy Panda and Culper Research issued reports alleging that AppLovin may have violated app store policies and exaggerated elements of its AI-driven ad platform. While the company has strongly denied the claims—asserting it is “building the world’s best advertising AI model”—the damage to investor sentiment is visible in its double-digit stock drop this month.
Still, AppLovin’s financials tell a powerful growth story. The company posted a 39% increase in revenue year-over-year in Q4 2024, alongside a 72% spike in adjusted EBITDA and a 300% surge in net income. Its AXON 2.0 platform continues to lead in performance-based advertising, with expansion into new sectors like e-commerce showing early promise.
Citi analyst Jason Bazinet remains bullish, issuing a $600 price target—suggesting more than 100% upside from current levels. He argues that AppLovin’s recent volatility is more about Wall Street misunderstanding its complex model than any fundamental weakness.
Despite the headwinds, many analysts believe the company could rebound—if it continues to deliver strong quarters and clarify its business practices. However, broader market uncertainty, rising interest rates, and fears of a potential U.S. recession could limit investor appetite for high-growth tech names.