APP Stock Rallies on Upbeat Q4 Forecast as Critic Retracts Money Laundering Claims
AppLovin is heading into its Q4 earnings release with renewed momentum, as a CapitalWatch retraction eases overhang concerns and investors..
Quick overview
- AppLovin is experiencing renewed momentum ahead of its Q4 earnings release, with shares surging approximately 17% following a strong Q3 performance.
- A retraction from CapitalWatch, which previously made critical allegations against AppLovin, has alleviated reputational concerns and boosted investor confidence.
- Consensus estimates for Q4 project earnings per share at $2.89 and revenue around $1.6 billion, indicating continued growth in mobile gaming advertising.
- Despite the positive outlook, regulatory scrutiny from the SEC regarding data-handling practices remains a potential risk for the company.
AppLovin is heading into its Q4 earnings release with renewed momentum, as a CapitalWatch retraction eases overhang concerns and investors position for another strong quarter.
AppLovin Regains Momentum Ahead of Q4 Results
Following a standout third-quarter performance, AppLovin (NASDAQ: APP) has re-entered rally mode as investors look ahead to its fourth-quarter earnings, scheduled for release after the bell on February 11. Market expectations have turned increasingly optimistic, with traders positioning for a potential earnings beat amid continued strength in mobile gaming advertising and the company’s MAX platform ecosystem.
That optimism was reflected in sharp price action at the start of the week. APP shares surged roughly 17% on Monday, pushing the stock to around $485 in after-hours trading. The move signals renewed confidence after a period of heightened volatility across software and AI-exposed names.
CapitalWatch Retraction Removes a Key Overhang
A major catalyst behind the rally came from CapitalWatch, one of AppLovin’s most vocal critics. Over the weekend, the research outfit issued a public correction and apology on social media, retracting several allegations made in prior reports.
CapitalWatch had previously described AppLovin in highly critical terms and had linked shareholder Tang Hao to alleged money-laundering activities and criminal organizations. In its revised statement, CapitalWatch acknowledged that those specific claims did not meet its internal standards and formally withdrew the related characterizations.
While the retraction does not amount to an endorsement of AppLovin’s business model, it removed a reputational overhang that had weighed on sentiment. The market response suggests investors were quick to reassess downside risks, particularly as the company approaches a key earnings event.
Investors Position for a Strong Q4 Earnings Print
AppLovin’s upcoming fourth-quarter results are expected to show continued operational momentum. According to consensus estimates, earnings per share are projected at $2.89, representing growth of roughly 67% year over year. Revenue is expected to reach approximately $1.6 billion, implying nearly 17% annual growth.
The outlook is underpinned by sustained demand in gaming advertising and expanding adoption of AppLovin’s MAX mediation platform. Following the “fantastic” Q3 performance, investors appear increasingly confident that Q4 could deliver another upside surprise, reinforcing the company’s growth narrative.
From Record Peaks To A Rapid Reset
AppLovin had been on a relentless ascent for most of 2025. Demand for its end-to-end app monetization platform and its AXON AI advertising engine fueled exceptional quarterly results, helping the stock climb to a record high of $747 in late September. A correction followed through October, ultimately dragging APP below $500 in November where APP stock found support at the 20 weekly SMA (gray) and rebounded.
APP Stock Chart Daily – The 100 SMA Held As Support
However, buyers failed to make new highs and APP stock reversed at $740 at the end of December and lost around 50% of the value until last Thursday as APP shares fell to $361. But the 100 SMA (green) held as support and we’re seeing a rebound this week which will likely extend higher if the Q4 earnings are positive.
Regulatory Scrutiny Still Lingers in the Background
Despite the renewed optimism, risks remain. Investor caution resurfaced in October after reports of a Securities and Exchange Commission investigation into AppLovin’s data-handling practices. The inquiry, led by the SEC’s Cyber and Emerging Technologies Enforcement Unit, is examining whether the company exceeded contractual limits in its use of data for targeted advertising.
The investigation reportedly stemmed from a whistleblower complaint and was amplified by short-seller research. Although no charges have been filed, AppLovin has acknowledged in regulatory filings that the process itself could pose financial or operational risks.
Q3 Earnings Ignite A New Wave Of Buying
The sentiment reversal was supercharged by AppLovin’s Q3 2025 earnings report, released on November 6. The company once again delivered one of the strongest results in the software sector this year.
The numbers were exceptional across the board:
- Revenue: $1.41 billion, up 68% year-over-year
- Net income: $836 million, rising 92% from last year
- Operating margin: an eye-popping 76.8%
- Operating cash flow: $1.05 billion
- Stock performance: 91% gain year-to-date
The core driver remains the company’s AXON 2.0 AI engine, which optimizes user acquisition and monetization by managing the full ad-delivery stack. This vertical integration has created one of the highest operating margins in the industry, allowing AppLovin to compound revenue growth with extraordinary profitability.
Management reinforced confidence by expanding the share-repurchase program by $3.2 billion. The company repurchased $571 million in stock during Q3 alone, providing a powerful tailwind during periods of volatility.
Balanced Outlook Into Earnings
With criticism easing and expectations elevated, AppLovin enters Q4 earnings week from a position of strength. Still, elevated valuations, regulatory uncertainty, and broader questions around AI-driven software economics suggest that volatility may persist, even if results come in strong.
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