AppLovin Stock Has One Thing Left To Prove

October 15th, 2026 · by Trefis Team
APPYTD-61.1%SPYYTD+13.5%XLCYTD-5.3%
Analyze APP →

AppLovin (APP) stock has lost 55.6% over the past year, trailing a 17.3% return for the S&P 500. Following that decline, shareholders may be counting on a newer line of business: selling web ads to online sellers, rather than just placing them in mobile games. The catch is that AppLovin has yet to show these sellers will actually spend money on a platform best known for games.

Image from Pixabay

AppLovin Is Still Unknown To Many Online Sellers

Management has said that many e-commerce businesses do not know AppLovin. A lot of those that do still view it as a mobile gaming platform. The company points out that mobile gaming customers did not know AppLovin ten years ago either. While AppLovin has secured some e-commerce customers, most online sellers still spend far more with other ad platforms.

During AppLovin’s second-quarter 2026 call, held August 5, 2026, analysts questioned executives about the web advertising business. By then, the business had launched to all advertisers. One question was whether low brand awareness among consumers was making it harder to win advertisers. Another point of discussion was whether AppLovin would now turn to connected TV.

AppLovin’s Revenue Growth Has Slowed Four Quarters Running

In the April to June 2026 quarter, AppLovin’s revenue grew 52.8% from a year earlier, compared to 77.0% in the same quarter of 2025. Growth has slowed in each of the four quarters since then. Management has guided third-quarter revenue to $2.06 billion to $2.09 billion. At its midpoint, that guide sits about 47% above the $1.41 billion posted in the same quarter in 2025.

The stock trades at 20.0 times its earnings over the past twelve months, compared to 22.7 for the S&P 500. For a company growing this fast, the price appears to assume slower growth ahead.

How Does AppLovin Plan To Grow Its Web Ads?

Management said the first place to show more of these ads is non-gaming apps on mobile devices, then the open web, and connected TV after that. The reasoning is that gaming ads occupy a niche, while e-commerce ads already appear across the open web and social media. Executives have also emphasized that the web ads business remains in its early stages. Those comments describe the stage of the business, but they fail to detail how much revenue it brings in today.

AppLovin’s next report, expected on or around November 4, 2026, will show third-quarter revenue against management’s guide. The key detail to watch is whether executives also disclose how much of that revenue actually comes from web ads.

Does This Mean You Should Act On APP?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

Invest with Trefis →More Ideas →