Now, I reckon there’s a sight of bother brewin’ ’round AppLovin’ [APP 15.59%], a company that deals in those little picture shows you see on your wireless contraptions. Shares took a tumble Wednesday, fallin’ a good sixteen percent, and extendin’ a decline that’s been goin’ on since the start of the year. A forty-two percent dip, mind you – enough to make a fella clutch his wallet a bit tighter. Seems they’re caught in a crossfire, what with newfangled competition threatenin’ to upset their apple cart. This CloudX, a young whippersnapper of a company, is promisin’ to automate the whole shebang with these “LLM agents” – sounds like somethin’ out of a dime novel, if you ask me – and Wall Street’s gettin’ a case of the jitters.
AppLovin’s Rough Patch
Now, AppLovin’ had a run, let me tell you. Shares shot up like a rocket for a spell, more than five thousand percent in under three years. But the higher you climb, the farther you have to fall, and fall they have. Seems every Tom, Dick, and Harry is takin’ a shot at ’em. Here’s the list of woes, as I’ve heard it:
- A report from CapitalWatch accusin’ ’em of playin’ fast and loose with the money – a serious charge, that.
- Google’s Project Genie, which threatens to let anyone make a game, and thus flood the market with more places to put those picture shows.
- A general sell-off of software stocks, folks gettin’ spooked by all this talk of “AI disruption.”
- This CloudX, puttin’ a name to the AI threat.
- An investigation by the SEC into how they collect information.
- More reports from folks accusin’ ’em of shenanigans.
Now, they did sell off their game-makin’ side of the business last year, so this Project Genie might not be as bad as it looks. Maybe it’ll just give ’em more places to put those picture shows. And despite all this fuss, they managed to grow sales and profits by a handsome margin – seventy-two percent and one hundred twenty-eight percent, respectively, in the first quarter of last year. So, the worries haven’t quite hit the bottom line… yet. At forty times free cash flow and twenty-eight times next year’s earnings, the price of the stock has come down a bit. Still, I ain’t rushin’ to buy just yet. I need to see which way the wind’s blowin’. They report earnings on February eleventh, so we ought to get a clearer picture then.
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2026-02-04 23:13