Applovin is poised for a significant market event this coming Monday, when its inclusion in the S&P 500 index becomes official. This prestigious milestone has already triggered substantial price movements and could establish a foundation for continued upward trajectory.
The catalyst for recent trading activity was the September 5th announcement from S&P Global. Market response was immediate, with shares surging nearly 12 percent on September 8th alone. This movement reflects mandatory purchasing by passive funds and ETFs that track the benchmark index, which must now add the equity to their portfolios.
Institutional Demand Creates Sustained Support
The index inclusion generates several powerful market dynamics that extend beyond speculative trading:
- Structural Buying Pressure: Index-tracking funds are required to rebalance their holdings and acquire Applovin shares
- Expanded Investor Reach: Access to a broader investment audience enhances both liquidity and market visibility
- Strategic Validation: Selection serves as an endorsement of the company’s business model and market position
Strategic Shift Delivers Results
Beyond the index narrative, Applovin’s renewed market strength reflects successful corporate restructuring. The June divestiture of its mobile gaming division enabled complete focus on the high-margin advertising technology platform.
Should investors sell immediately? Or is it worth buying Applovin?
The company’s artificial intelligence-powered advertising technology and expansion into e-commerce services are viewed as primary growth engines. Second quarter 2025 results demonstrated this strategy’s effectiveness, with both revenue and profit projections exceeding expectations.
Assessing Market Valuation
Following substantial appreciation, some market participants have raised concerns about potential overextension. Technical indicators suggest the stock may be entering overbought territory, with elevated valuations reflecting heightened growth expectations.
Despite these concerns, analysts have repeatedly raised price targets, citing sustainable growth potential across multiple customer segments. Third quarter 2025 guidance continues to reflect management’s confidence in both expansion capabilities and margin maintenance.
The central question remains whether Applovin can deliver on elevated expectations or if the index-driven enthusiasm will give way to market reassessment.
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