AXON
Axon Enterprise, Inc. Common Stock
stock NASDAQ

STO 4/17 AXON 700C (covered) for $7.29

INTU, RKT, AXON, UI imo

AXON bullish

Our quantitative screening algorithm just flagged AppLovin (APP) as the #4 top quality stock this month. The stock is down \~40% from its December highs, so I figured it was worth sharing the full breakdown. This is a genuinely fascinating setup where elite fundamentals are colliding with real, emerging risks.
**What AppLovin actually does**
For those unfamiliar, AppLovin is basically an AI-powered toll booth sitting between mobile app advertisers and publishers. App developers pay to find users likely to download and spend money. Publishers auction ad inventory in real time. AppLovin's AI engine (AXON) sits in the middle, predicting which user responds to which ad and taking a cut of the spend flowing through. As the AI gets smarter, the toll gets more valuable.
**The numbers are absurd**
This is why our algo flagged it. Revenue hit $5.5B in FY2025, up from $483M in 2018. Gross margins at 87.9% (yes, not a typo!). Net profit margin at 60.8%. ROE at 156%. Free cash flow of $3.9B with an income quality ratio of 1.16. EPS went from -$0.52 in 2022 to $9.84 in 2025.
Against 87 tech peers, AppLovin ranks 100th percentile on net profit margin and 95th on revenue growth (i.e. beats most of the sector peers). It's not choosing between growth and profitability, it's delivering both at the top of its class.
**So why is it down 40%?**
A lot is happening at once. There's an active SEC investigation into data collection practices. Muddy Waters and Culper Research published short reports alleging unauthorized tracking of user identifiers across Meta and Google's platforms. Meta itself is becoming a more direct competitor. There's also a new entrant called CloudX that could threaten AppLovin's core distribution advantage. On top of all that, the broader 'AI replaces software' sentiment overhang isn't helping. All of this despite zero operational deterioration.
**What smart money is doing**
Institutional ownership is 70.8% across 1,654 institutions. But Q4 2025 saw $11.1B in net institutional outflows after a massive Q3 buying spree ($102B).
On the insider front, consistent net selling throughout 2025 though open market sales over the past 90 days happened at prices between $525 and $693, well above where the stock sits today around $435.
**Valuation: the real debate**
Stockoscope's DCF model puts intrinsic value around $410, so the stock is roughly fairly valued right now. It trades at 44.1x P/E which is reasonable for the growth profile, but it also commands the highest EV/Sales multiple in its entire peer group at 25.5x.
Wall Street is overwhelmingly bullish with 88% buy ratings and a median target of $691, implying 59% upside. Analysts are projecting revenue more than doubling by 2028 and EPS growing north of $25 from around $10 now.
**My take**
Let me first summarise our 5D scores: Quality - 3.9/5, Peer comparison - 4.1/5, Valuation 2.8/5, Analyst sentiment 4.3/5, and Holdings 3.6/5
This is a legitimately great business trading near fair value based on DCF but overvalued based on valuation multiples, with meaningful unresolved risks hanging over it.
If the SEC investigation clears, competitive threats prove manageable, and the growth trajectory holds, the current drawdown looks like a gift. If the risks materialize, there's not a lot of margin of safety at these multiples.
It's a growth investor's stock, not a value investor's stock. At least not yet. But the quality score earned its #4 ranking for a reason, and I think this is worth having on your watchlist regardless of where you fall on the style spectrum.
*Analysis based on data as of Feb 28, 2026. Data source: FMP*
*Not investment advice, just sharing what our framework surfaced.*
What's your read on APP at these levels?

I guess I will just blast you with some tickers: MSFT, AMZN, MCK, CDNS, BR, MA, KLAC, ASML, CBOE, OTCM, MSCI, CME, AXON, there's more and I wouldn't just buy these at any price, semi's are ahead of there skies atm while 1-3 years from now they could understandably drop 50%.

As the barrier to entry for building apps hits zero, the competition for eyeballs hits infinity. Vibe coding is flooding the app stores with millions of new products. Most will fail, but all of them will spend money trying to get noticed.
Most "vibe coders" have too much enthusiasm and not enough experience. They dont have time for testing variants before honing in on the most effective refined campaign. They want speed and results. For a vibe-coder, speed is the only metric that matters—because in their world, shipping fast is everything. "If they aren’t first, a whale will just clone their idea, polish the UI, and buy up all the traffic before they even get off the ground.
So how does app lovin help vibe coders:
AppLovin isn't selling ads to these people; they are selling a Feedback Loop. Most vibe coders will give up within weeks. But the ones who stick around realize that AppLovin has given them something more valuable than "traffic." They get real-time data on the product itself:
\* Does the user actually finish the tutorial?
\* Do they buy that specific weapon or power-up?
\* Do they click the "Premium" button or close the app?
While the coder is "vibing" the UI, AppLovin’s AXON is stress-testing the business model. For the cost of a few hundred installs, the creator finds out if they have a hit or if they need to pivot.
Since 2023, AppLovin’s net income hasn't just grown—it has essentially 10x’d (from \~$350M to over $3.3B in 2025).
When a company is firing on all cylinders like this, the "execution risk" is basically zero. The machine works. The only real question left is the P/E ratio.
Both App lovin and Nvidia have a similar PE, but how much room is there for Nvidia to grow not much, maybe 60 percent with acquisitions, partnerships and chips in cars. Meanwhile for app lovin to grow it just has to do what its done in the last two years.
So is this is no brainer growth stock. Not exactly firstly app lovin exists within an ecosystem whereas Nvidia owns its ecosystem. If apple changes the rules they are vulnerable.
Secondly AppLovin is getting hungry for growth beyond mobile ads. After their failed attempt to buy TikTok last year, they’ve started hiring to build their own social platform.
This is a classic "Zuckerberg Metaverse" moment. It’s a high-stakes move that could either wet appetites or spook investors who liked them better as a clockwork high-margin engine.
If applovin are serious about a new trajectory this is the only way it would work.
They would have to flip the network on its head.
Not a user friendly network but an Ad-First" network where ads are the content , and the users are the ads
—users now compete to find rank and review the best new apps
It sounds crazy—until you realize two things:
1. There’s a massive, untapped army of "niche" influencers. Look at TikTok: millions of people are out there reviewing random cat toys or "TikTok Shop" gadgets. Most of them aren't any good at it, and the market is saturated. These same creators would jump at the chance to review apps for rewards, status or recognition by the app company. AppLovin can mobilize an army of micro-influencers to do the discovery work that the App Store currently fails at.
2. AppLovin understands behavioral feedback loops better than almost anyone on the planet.

AXON