Why is $AppLovin Corporation(APP)$ not a buy?
That’s the question worth asking after looking at the numbers.
🔥 1. The business is unusually efficient
How many companies can combine high growth, an asset-light model and roughly 77% operating margins?
AppLovin has built exactly that kind of business around its advertising technology. The key isn’t simply selling ads. It’s using AI to decide which ad to show, to whom, and at what price — and getting better as more data flows through the system.
🌍 2. The market opportunity is still enormous
The global mobile advertising market could exceed $1 trillion over the next decade.
And mobile gaming is only one piece of the opportunity.
As e-commerce moves further onto mobile, the value of advertising inside apps should continue to expand. That gives AppLovin room to grow beyond its traditional gaming-heavy base.
📺 3. CTV could open another growth curve
Connected TV is still relatively early in its development.
For AppLovin, that means another advertising vertical where its optimization technology could potentially gain share.
If AXON can replicate its performance in CTV, the addressable market becomes dramatically larger.
🤖 4. AI could make advertising creation almost frictionless
This may be one of the most interesting pieces of the story.
As AI-generated video becomes good enough, advertisers may no longer need agencies, production teams or complicated workflows to launch campaigns.
Imagine creating an entire advertising campaign with just a few clicks.
That could dramatically increase the number of businesses willing to advertise — and potentially create more inventory and demand for AppLovin’s platform.
💰 5. Then there is the cash
If current growth continues, AppLovin could generate roughly $20 billion in cash over the next three years.
Some of that can go toward buybacks.
But the bigger question is whether APP should use part of that cash to buy growth rather than simply buy back shares.
And that brings us to $Trade Desk Inc.(TTD)$ .
🤔 Should AppLovin buy The Trade Desk?
Strategically, the idea makes sense.
AppLovin has the AI-powered ad optimization engine.
The Trade Desk has a strong position across programmatic advertising, CTV and the broader open internet.
Put the two together, and you could theoretically get a much broader advertising platform spanning mobile, gaming, e-commerce, CTV and the open web.
But there’s a catch.
TTD doesn’t have APP’s growth profile.
So the question isn't whether TTD would make APP bigger.
It would.
The real question is whether buying TTD is the best way to deploy APP’s enormous future cash flow.
Maybe it is.
Maybe APP can build the same capabilities organically — and keep the economics for itself.
That may ultimately be the more important investment question.
APP doesn't necessarily need to buy TTD to become a giant in digital advertising. It needs to prove that AXON can keep expanding into every major advertising channel. 🚀
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