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LivestreamMenuInvestors should steer clear of AppLovin after the company released a mixed second-quarter report, according to Piper Sandler. Analyst James Callahan downgraded the ad software stock to neutral from overweight. He also slashed his price target to $385 from $665 — signaling 7.9% downside from Wednesday’s close. The lowered rating comes after AppLovin posted mixed results for the second quarter and third-quarter profit guidance that missed expectations, sending shares lower by more than 16% in the premarket. “Mgmt attributed the miss to the timing of model improvements, which will reverse in 3Q. Our concern: we think the frequency or magnitude of directed model improvements may need to be larger going forward in order to hit Street expects,” Callahan wrote to clients. APP YTD mountain APP in 2026 “This would also explain (1) higher compute cost during 2Q and (2) investments to build new model architectures going forward,” he added. “We remain impressed by mgmt, the business, and their market position, but we have more questions than answers on beat/raise cadence from here, and move to the sideline.” AppLovin was one of the top-performing tech stocks not that long ago. In 2024, the stock soared a whopping 713% — outpacing all other stocks in the Nasdaq-100 index that year. In 2025, it jumped another 108%. Shares have struggled this year, however, losing 38%, amid broader declines in software names. The iShares Expanded Tech-Software Sector ETF (IGV) is down 4% in 2026, while the S & P 500 has climbed 13% to record levels. Most analysts are bullish AppLovin despite the Piper Sandler downgrade. Of the 32 who cover it, 29 rate it a buy or strong buy, according to LSEG.Read More
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