Why AppLovin Stock Soared 31% on a Day the Nasdaq Fell 6%

AppLovin's third-quarter revenue grew 55% to $2.18 billion and its fourth-quarter guidance topped estimates, sending the stock up 31% in a falling market. At about 18 times 2027 earnings, we think it is a buy for investors who can handle the swings.

Maz Vantage Research · 5 Nov 2026

Key points

AppLovin stock rose 31% to $356.10 on 5 November 2026, its best day in nearly two years, while the Nasdaq-100 fell 6.5%.
Third-quarter revenue grew 55% to $2.18 billion, about 5% above consensus, and fourth-quarter guidance points to another record.
At about 18 times 2027 consensus earnings, we rate the stock a buy for investors who can live with large swings.

AppLovin (NASDAQ: APP) shares jumped 31% on Thursday, closing at $356.10, after the mobile advertising company beat third-quarter estimates and guided above expectations. The rally came on a day when the S&P 500 ETF lost 4.4% in an AI-chip selloff. We think the report answered the main worry from August, that growth was slowing, and at roughly 18 times next year's expected earnings the stock looks reasonably priced for a business still growing faster than 40%.

What happened

AppLovin reported after the close on 4 November. Revenue was $2.185 billion, up 55% from a year earlier and 14% from the second quarter. GAAP net income, the profit figure under standard accounting rules, rose 72% to $1.44 billion, or $4.30 per diluted share. Adjusted EBITDA, a profit measure that leaves out items such as stock-based pay, depreciation and interest, rose 59% to $1.84 billion. The company said both revenue and adjusted EBITDA came in above the top of its own guidance range.

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The stock had a lot of ground to recover. It closed 2025 at $673.82 and fell about 20% after its second-quarter report in August, when revenue slightly missed estimates and the third-quarter outlook landed roughly in line. It closed at $228.50 on 30 October. Even after Thursday's jump, it is down 47% for the year.

Other ad-tech stocks moved with it. Magnite rose 21% and Unity rose 15% after its own report, while The Trade Desk fell 3%.

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The numbers against expectations

Metric	Q3 2026 actual	Consensus	Difference
Revenue	$2,185M	$2,075M	+5.3%
Diluted EPS (GAAP)	$4.30	$4.03	+6.7%
Adjusted EBITDA	$1,842M (84% margin)	n/a	Above company guide
Q4 revenue guide	$2,365M to $2,395M	$2,284M	+4.2% at midpoint

Consensus figures are from Maz Vantage's data. Q4 consensus may not yet fully reflect the new guidance.

Cash generation was the other strong point. Operating cash flow was $1.43 billion, and with almost no capital spending, free cash flow, the cash left after capital spending, was about the same. That was about 77% of adjusted EBITDA, up from 53% in the second quarter, according to the earnings call. AppLovin repurchased or withheld 4.1 million shares for $1.4 billion in the quarter, and the board added $3.2 billion to its buyback authorization, bringing the remaining total to $3.6 billion at the end of October.

What management guided

The fourth-quarter outlook calls for revenue of $2.365 billion to $2.395 billion and adjusted EBITDA of $1.995 billion to $2.025 billion, an 84% to 85% margin. The midpoint implies 44% growth from a year earlier. Sequential growth would slow to 8% to 10% from 14% in the third quarter, which is worth noting.

On the call, CEO Adam Foroughi said he believes the business can compound at roughly 30% a year over the long term. He also warned that as e-commerce advertisers become a bigger share of the business, fourth quarters should get stronger and first quarters weaker, because those advertisers spend heavily around the holidays. That means a softer-looking first-quarter guide in February would not, on its own, signal a problem.

Valuation and verdict

Measure	Value
Price (5 Nov. close)	$356.10
Market value	$108.9B
P/E on 2026 consensus EPS ($15.69)	22.7x
P/E on 2027 consensus EPS ($19.68)	18.1x
Average analyst price target	$492.78 (+38%)
Target range	$325 to $775

Several firms raised targets after the report, including Wedbush to $600 and Evercore ISI to $540. Goldman Sachs raised its target to $445 but kept a hold rating. Maz Vantage's quant grade, computed on 1 November before the report, rated the stock a Buy at 3.48 out of 5, with high marks for profitability (4.8) and growth (4.3) and a low score for momentum (1.65).

The bear case is real. A securities class action filed over statements made between February and August 2026 alleges the company overstated the readiness of its AI models and self-service tools; the lead-plaintiff deadline is 16 November. The stock is volatile, with a beta (a measure of how much it swings relative to the market) of about 2.5. Net debt is small at about $342 million, but advertising budgets can shrink quickly in a downturn.

Our view: buy, at $356 and about 18 times 2027 earnings. The call rests on revenue growth staying above 30% through 2027 and margins holding near 84%. If both hold, today's multiple is modest for this growth rate. Position sizes should reflect the volatility.

What would change our view

Fourth-quarter revenue below $2.365 billion, the bottom of guidance, when AppLovin reports on or around 10 February 2027.
Adjusted EBITDA margin falling below 80%, which would suggest model training and computing costs are rising faster than revenue.
Free cash flow conversion dropping back toward the 53% seen in the second quarter.
Any adverse development in the securities class action or a regulatory inquiry into the company's ad practices.

Prices as of the 4:00 p.m. ET close on 5 November 2026.

Data sources: Maz Vantage's data (quotes, price history, financial statements, consensus estimates and price targets), AppLovin's third-quarter 2026 release and filings, and the news sources below.

This article is general research, not personal investment advice. It does not consider your goals, timeline or tax situation.

AI disclosure: written with the help of AI tools from market data and the sources listed.

Author: Maz Vantage Research