Is APP a good stock to buy? We came across a bullish thesis on AppLovin Corporation on Accrued Interest’s Substack by Simeon McMillan. In this article, we will summarize the bulls’ thesis on APP. AppLovin Corporation’s share was trading at $466.09 as of April 16th. APP’s trailing and forward P/E were 46.42 and 30.21 respectively according to Yahoo Finance.
AppLovin Corporation provides end-to-end artificial intelligence-powered advertising solutions for businesses in the United States and internationally. APP delivered a strong Q4 2025 earnings report, yet AppLovin shares sold off roughly 40% as broader ad-tech multiple compression and fears around a “Meta ceiling” overshadowed fundamentals. Despite the reaction, AppLovin’s “beat and raise” quarter underscored resilient growth, with $1.66B revenue and $3.24 EPS, alongside strong Q1 guidance indicating continued sequential expansion even in a seasonally weak period.
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The market disconnect is driven by valuation compression versus Meta Platforms, with AppLovin trading near 25x 2026 earnings compared to Meta’s ~22x, leaving only a small premium despite materially higher growth and capital efficiency. AppLovin’s core bull case rests on its capital-light model, generating ~80% free cash flow margins and only ~0.3% capex intensity, positioning it as a rare AI-adjacent compounder without heavy infrastructure burdens.
Management conviction was highlighted through aggressive buybacks, including repurchases executed near $602 per share, signaling strong internal confidence and opportunistic capital allocation as the stock has since declined. Beyond buybacks, AppLovin continues to scale its AXON AI engine and e-commerce expansion, with generative AI tools reducing ad creation costs and expanding the total addressable market by attracting non-gaming advertisers.
The rollout of e-commerce remains deliberate rather than delayed, with early adoption showing increased spend from existing customers as AppLovin refines its platform ahead of broader general availability. Overall, AppLovin remains a structurally advantaged, capital-light compounder where short-term sentiment-driven de-rating obscures accelerating free cash flow, expanding AI-driven monetization, and a long-duration growth runway that supports significant upside if execution continues and multiple compression reverses over time outlook.
Previously, we covered a bullish thesis on AppLovin Corporation (APP) by Jimmy Investor in March 2025, which highlighted its AI-driven ad tech dominance, capital-light software model, and strong financial performance supported by AXON-powered monetization and expansion in digital advertising. APP’s stock price has appreciated by approximately 80.82% since our coverage. Accrued Interest shares a similar view but emphasizes valuation compression, post-earnings volatility, and “Meta ceiling” concerns impacting near-term sentiment.
AppLovin Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 108 hedge fund portfolios held APP at the end of the fourth quarter which was 110 in the previous quarter. While we acknowledge the risk and potential of APP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APP and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
