AppLovin Skyrockets 2.76% – Is This the Dawn of a New Bull Run?

Summary
• AppLovin (APP) surges 2.76% to $359.67, trading near its 52-week high of $525.15.
• Short-seller allegations over ad fraud and privacy violations spark regulatory scrutiny.
• Analysts at Simply Wall St estimate APP is 23% undervalued via DCF analysis.
• Leveraged ETF Tradr 2X Long APP Daily ETF (APPX) jumps 5.18%, amplifying bullish momentum.

AppLovin’s explosive rally has ignited investor debate amid a storm of short-seller reports and valuation optimism. With institutional turnover at 1.34% and a 52-week low of $60.67, the stock’s ascent defies its controversial reputation. The intraday range of $349.21 to $363.67 underscores volatility, as traders weigh risks against a $455 fair value estimate.

Short Seller Allegations and DCF Valuation Spark Rally
AppLovin’s surge stems from a collision of bearish short-seller reports and bullish valuation models. Muddy Waters and Fuzzy Panda have accused APP of ad fraud, illicit user tracking, and COPPA violations, yet institutional investors remain unfazed. Meanwhile, Simply Wall St’s DCF analysis suggests the stock is 23% undervalued at $350, with a $455 fair value target. The 52-week low of $60.67 and 52-week high of $525.15 highlight the stock’s extreme volatility, as investors bet on its AI-driven ad optimization engine despite regulatory risks.

AppLovin Outperforms as Advertising Sector Struggles
While the Advertising & Marketing sector faces headwinds, AppLovin’s rally contrasts sharply with its peers. Alphabet A (GOOGL), the sector leader, fell 0.35% on the day, signaling broader industry fragility. APP’s AI-powered Axon platform and aggressive monetization of mobile gaming ad inventory position it as a disruptor, even as competitors like Meta and Google grapple with antitrust pressures. The sector’s reliance on first-party data gives APP a unique edge—if regulators don’t intervene.

APPX ETF and Strategic Options for a Volatile APP Rally
• MACD: 0.99 (bullish crossover), Signal Line: -0.89 (oversold), Histogram: 1.88 (momentum)
• RSI: 57.5 (neutral), 200D Avg: 310.42 (far below), Bollinger Bands: $328.80–$367.86 (price near upper band)

AppLovin’s technicals suggest a short-term bullish breakout. The 200-day average of $310.42 is a critical support level, while the RSI at 57.5 indicates room for upward momentum. The Tradr 2X Long APP Daily ETF (APPX, +5.18%) offers leveraged exposure to amplify gains. For options, two contracts stand out:

• APP20250801C360
- Call, $360 strike, 2025-08-01 expiration
- IV: 58.83% (high volatility), Delta: 0.51 (moderate sensitivity), Gamma: 0.0114 (responsive to price swings), Theta: -1.44 (rapid decay), Turnover: 572,722 (liquid)
- Payoff: At 5% upside ($377.65), max gain = $17.65/share. This call balances volatility and liquidity for a breakout.

• APP20250801C355
- Call, $355 strike, 2025-08-01 expiration
- IV: 55.99% (moderate), Delta: 0.57 (strong directional bias), Gamma: 0.0118 (high sensitivity), Theta: -1.48 (aggressive time decay), Turnover: 309,839 (active)
- Payoff: At 5% upside, max gain = $22.65/share. This contract offers a lower strike price for higher leverage, ideal for a sharp move.

Aggressive bulls should prioritize APPX and APP20250801C355 as the stock tests $360. If $349.21 support holds, the rally could extend to $380.

Backtest Applovin Stock Performance
The backtest of Apple's (AAPL) performance after an intraday surge of at least 3% shows positive short-to-medium-term gains, with the 3-Day win rate at 55.22%, the 10-Day win rate at 61.15%, and the 30-Day win rate at 62.41%. The maximum return observed was 17.88% over 30 days, indicating that such events can lead to significant price appreciation in the following weeks.

Bullish Momentum Unlikely to Fade – Position for a Volatile APP Run
AppLovin’s rally is driven by a mix of undervaluation, AI-driven growth, and leveraged ETF demand. While short-seller allegations linger, the stock’s technicals and institutional backing suggest momentum will persist. Watch for a break above $363.67 and a retest of $328.79 (lower Bollinger Band). Alphabet A (GOOGL)’s 0.35% decline highlights sector fragility, but APP’s unique ad-tech edge could sustain its outperformance. Aggressive traders should target APPX and APP20250801C355 for a high-volatility trade, with a stop-loss below $349.21.