$APP · AppLovin

Thesis

Wrecked YTD (-37.8%) and 36% below Street PT — positioning is washed out. We model +4% EPS beat + a small FY rev raise on CTV monetization traction, which is the base-case trigger for a short-cover snapback rather than another guide-down.

What would flip it

If CTV guide only reaffirms, the squeeze fades and this is a +1% shrug.

The market's narrative

Adtech darling wrecked YTD (-37.8%) on 1Q slowdown + AI-monetization skepticism; Street braced for another guide-down.

Where the Street may be wrong

• Connected-TV inventory rollout beginning to monetize in Q2 — was model gate for Wall Street to unfreeze bull thesis; management flagged CTV take-rate improvement on 1Q call.
• Short interest 12.4% + spot 36% below Street avg PT $656 = deeply underweight positioning heading into a name that has already priced in a bad print.

Peer read: Adtech peers TTD + META Reels-monetization commentary read positive last 30d; broader digital-ad ecosystem accelerated in July.

Reasoning

• FY guide revision direction: our base case is a small RAISE on FY26 rev (~$8.05B → $8.15B) on CTV traction — small but meaningful vs Street modeling a reaffirm.
• Positioning gate fires washed-out template: YTD -37.8% + 12%+ short interest + 36% below-PT = the AMGN-style beat-and-raise-snapback setup we just wrote a lesson on today.
• EPS h2h: our $3.88 vs Street $3.72 (+4.3% gap) — gaming ads gross margin structurally re-basing higher on the take-rate work done in Q1.
• Technicals: below 50/200 EMA cross ($478.60) but 30d already +3.8% — mean-reversion base builds; volume in-line into print, not distributing.
• Guide-over-print risk: if management reaffirms FY26 without raising CTV segment guide, the washed-out squeeze fades to +2%. Base case still positive.