A new research note sounding a cautionary note about AppLovin (APP -4.71%) drove the adtech company's stock down on Wednesday. Investors clearly took the analysis to heart, selling out of the shares to leave them with a 4% loss that trading session.
Change in sentiment
Edgewater Research's Joe Wittine was the person behind that note, and his warning was that AppLovin is not expanding its market share.
Image source: Getty Images.
According to reports, he conducted channel checks with the company's business partners and/or clients. These indicated to him that, despite its historically strong market position, it might be coming under pressure from determined competitors. Wittine specifically singled out Unity as one of these threats.
This led Wittine to set a relatively low estimate for sequential revenue growth in AppLovin's next (fourth) quarter. He believes the adtech company's top line will expand by 8% to 9%, which is notably below the current analyst consensus.
APP AppLovin
NASDAQ · As of 4:00 PM ET 10/16/26
Mobile moves
The analyst's move marks a notable shift in his sentiment on AppLovin. In June, Wittine upgraded his rating on the stock to outperform (read:buy) from his previous neutral. At the time, according to reports, he wrote that an effort by the broad mobile video game industry to bolster ad revenue would provide a lift for the company.
The new take on AppLovin is concerning; it's always difficult to maintain or expand a leading position, and perhaps the company is struggling in its effort. I'd keep a close eye on how well it does, as reflected in near-term earnings reports -- and be wary if its market share hasn't moved much higher.
