To The Moon

1. Robinhood vs. AppLovin – which business model has more staying power in the S&P 500?

Robinhood:

Strengths: Strong brand recognition among retail traders, significant user base, and exposure to the continued financialisation of younger demographics.

Weaknesses: Its revenue is highly tied to trading volumes (particularly options and crypto), which are cyclical and sensitive to market sentiment. It also faces regulatory risks, customer churn when markets quiet down, and stiff competition from larger brokerages. Sustainability depends on expanding into more stable revenue streams (cash management, retirement accounts, etc.), but progress is mixed.

AppLovin:

Strengths: It provides a mission-critical service—adtech that helps mobile game developers monetise. The company’s AI-driven software platform (AXON) has scaled well, making it an infrastructure play in the mobile economy. This gives it recurring revenue from a broad developer ecosystem rather than reliance on a single consumer behaviour trend.

Weaknesses: Exposure to broader digital advertising cycles, plus dependence on Apple/Google’s app store policies and privacy frameworks (such as ATT changes). However, its pivot toward AI-based optimisation has insulated margins and powered explosive growth.

Assessment: From a pure durability standpoint, AppLovin’s infrastructure-like adtech model appears more resilient than Robinhood’s transaction-driven brokerage business, which is far more cyclical and regulatory-dependent.

---

2. Index inclusion – long-term signal or “sell the news”?

Short term: Historically, S&P 500 inclusion often leads to a “sell the news” reaction after initial buying pressure from index funds, as traders front-run the passive flows. This effect can be pronounced in names that have already run up sharply, as is the case with both Robinhood and AppLovin.

Long term: Inclusion itself does not guarantee lasting performance. It is more of a validation of size and liquidity rather than a signal of future fundamentals. Long-term staying power will depend on execution and the resilience of each company’s business model.

Bottom line: Index inclusion should be seen as a milestone, not a catalyst. In the short term, it often creates volatility and opportunities to “fade the news”, while in the long term, it matters only if the underlying businesses continue to deliver.