It has been a wild ride with AppLovin (APP) lately, but I am finally seeing some green on my June long call. After opening this position when the share price was sitting in the low 400s, I had to white-knuckle through a massive drawdown that saw the stock plummet from its recent high of about $745.61 down to a mid-February low near $357. That is a staggering 52% drop in just a couple of months, fueled by a perfect storm of an SEC investigation, short-seller attacks, and fears over Google’s new AI game-creation platform. Even after reporting record Q4 results in February, the stock faced heavy selling pressure as the market weighed regulatory risks and new competition like CloudX.
I am feeling much better now that the price has found some traction and pushed back toward the $480 range. It is a relief to see the AI-driven AXON engine finally getting some credit again, especially with the company guiding for strong revenue growth in the first quarter. While the negative news around app store accountability laws and SEC scrutiny hasn't completely vanished, the bounce off that $357 low shows there is still a lot of institutional appetite for this ad-tech leader. I’m holding onto this June call with a bit more confidence now that we've weathered the worst of that 50% haircut.
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