Chip Stock Investor Podcast Is the Software Apocalypse Continues: Buying the AppLovin Dip (APP)
Feb 18, 2026
They debate whether AppLovin’s stock dip is a buying opportunity amid a wider software sell-off. The conversation covers explosive revenue guidance, massive EBITDA margin expansion, and AI-powered Axon 2.0 ad matching. Free cash flow and balance sheet repair get attention. They run a reverse DCF and outline a potential nibble strategy if price reaches the low $400s.
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Clarified Core Business Metrics
- AppLovin's divestiture of its apps business clarifies comparability for guidance.
- Removing apps revenue reveals pure Axon ad growth, explaining the strong year-over-year jump.
Explosive Revenue Guidance
- AppLovin's Q1 2026 guidance implies ~52% revenue growth after excluding divested apps revenue.
- Nicholas and Casey highlight this as evidence the core Axon ad business is driving rapid expansion.
Skyrocketing EBITDA Margins
- AppLovin's adjusted EBITDA margin is expanding toward 84%, showing massive cash conversion.
- The hosts treat this margin expansion as evidence the AI-driven ad stack is highly profitable.