AppLovin stock drops 54% YTD despite strong earnings; UBS sees 158% upside potential

AppLovin's stock has fallen 54.62% year to date, dropping sharply after a slight revenue miss in Q2 2026 despite beating EPS estimates and strong margin growth. The company runs an AI-driven mobile ad platform with high margins and expects long-term revenue growth around 30%. UBS analyst Stephen Ju remains bullish, forecasting a $790 price target, implying 158% upside, based on continued monetization improvements, expansion into e-commerce ads, and strong operating leverage. The stock trades at a forward P/E of 20, unusual for its rapid revenue growth, but volatility and execution risks keep it speculative. AppLovin's future depends on confirming revenue acceleration and successful expansion beyond gaming ads.