AppLovin (APP) Stock Plunges 13% as Bank of America Warns of E-Commerce Slowdown

Key Takeaways

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AppLovin shares plummeted 13% Monday, closing between $442 and $452, marking one of the S&P 500’s steepest declines.
Bank of America tracking data revealed approximately 750 new e-commerce pixels added in June, declining from May’s 950.
Total merchant count reached roughly 8,300, though growth momentum stalled following the June 22 platform expansion.
BofA analyst Dessouky reduced 2026 revenue projections by $130 million and 2027 estimates by $255 million.
The stock has declined 18.56% across five consecutive sessions; second-quarter results scheduled for August 5.

Shares of AppLovin experienced a significant downturn Monday, plummeting 13% to settle in the $442–$452 range, positioning the company among the S&P 500’s poorest performers for the session. This latest decline marks the fifth straight day of losses, accumulating to an 18.56% retreat during that span.

AppLovin Corporation, APP

The catalyst behind the selloff came from a fresh Bank of America research note authored by analyst Omar Dessouky, who raised concerns about decelerating momentum in AppLovin’s e-commerce advertising division.

Leveraging Store Leads tracking data, Dessouky observed that AppLovin incorporated approximately 750 new pixels throughout June, representing a notable decline from May’s figure of 950. While the total merchant base expanded to roughly 8,300, weekly statistics haven’t shown significant acceleration since the platform became accessible to all e-commerce advertisers on June 22.

During the initial seven days following the comprehensive rollout, both installation and removal activity increased — suggesting advertisers were experimenting with the technology. However, with merely two weeks of available information, Dessouky exercised caution, emphasizing it’s premature to establish definitive trends.

The analyst additionally emphasized that initial platform testers haven’t likely produced substantial revenue contributions to date.

In efforts to engage smaller merchants who were previously excluded, AppLovin has deployed brand visibility campaigns across YouTube and Meta platforms. The organization simultaneously introduced a lead generation offering aimed at premium sectors including insurance and home services — industries traditionally dependent on Google and Meta for client acquisition.

Dessouky highlighted that insurance represents a high-lifetime-value segment where customer acquisition expenditures approximate 5x mobile gaming investments. This presents considerable opportunity should the platform secure meaningful adoption.

Bank of America Reduces Revenue Projections

While preserving his Buy recommendation and $705 price objective, Dessouky adjusted his financial forecasts downward. His 2026 revenue projection decreased by $130 million, now anticipating 15,000 general availability advertisers by year-end rather than the prior expectation of 20,000.

His 2027 revenue estimate received a $255 million reduction, although the model continues to project 55,000 advertisers by that year’s conclusion.

Dessouky characterized AppLovin’s current valuation as “reasonable” at 17x 2027 EBITDA, acknowledging that gaming operations could still deliver growth exceeding 20% annually. He cautioned that short-term headwinds may persist until more definitive adoption indicators materialize.

Broader market weakness compounded the situation. The Nasdaq declined 1.55% Monday, while the S&P 500 retreated 0.79% and the Dow Jones dropped 0.26%, as market participants digested escalating US-Iran geopolitical concerns.

Second Quarter Results Expected August 5

AppLovin is scheduled to unveil Q2 2026 financial results on August 5. Management has provided revenue guidance ranging from $1.915 billion to $1.945 billion, representing 52% to 54% year-over-year expansion from the $1.259 billion recorded in Q2 2025.

Adjusted EBITDA guidance spans $1.615 billion to $1.645 billion, translating to 58.6% to 61.6% annual growth.

Despite recent volatility, Wall Street sentiment remains predominantly optimistic. APP maintains a Strong Buy consensus rating on TipRanks, supported by 20 Buy recommendations versus one Hold. The consensus price target of $666.32 suggests approximately 50% appreciation potential from present trading levels.

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