Quick Read
AppLovin (APP) posted 84% EBITDA margin in Q4, $1.309B quarterly free cash flow up 88% YoY, and $3.952B annual free cash flow. Alphabet (GOOGL) has $402.8B revenue. The Trade Desk (TTD) fell 56% past year. Cramer flags Google as competitive threat to AppLovin’s 84% margins, pointing to The Trade Desk’s 56% decline as precedent.
Jim Cramer has a warning for anyone chasing AppLovin (NASDAQ:APP) right now, and it comes down to one word: Google.
During a recent Mad Money Lightning Round, a caller asked Cramer about AppLovin as an AI-driven advertising platform. His response was blunt:
“Too much risk there. I do fear that. Kind of like what happened with Trade Desk. You come in, you wake up and Google’s there. I don’t want Google to be coming in after me. And I think the margins are so good that who knows what will happen.”
That last line is the key. Cramer isn’t dismissing AppLovin’s business. He’s flagging that its success might be the very thing that invites a predator.
The Margin Story Is Extraordinary
AppLovin’s numbers are genuinely impressive. The company’s AXON 2 AI engine has driven an adjusted EBITDA margin of 84% in Q4 2025, up from 77% a year earlier. Free cash flow hit $1.309 billion in Q4 alone, up 88% year-over-year. For the full year, AppLovin generated $3.952 billion in free cash flow.
Those are the kinds of margins that make a business look like a toll bridge. They also make it look like a very attractive lane for a much larger truck to drive through.
That truck is Alphabet (NASDAQ:GOOGL). With $402.8 billion in trailing revenue and a 32.8% profit margin, Google doesn’t need AppLovin’s market to survive. It just needs to want it.
The Trade Desk Is the Cautionary Tale
Cramer’s invocation of The Trade Desk (NASDAQ:TTD) isn’t random. TTD built a genuinely compelling programmatic advertising platform, maintained customer retention above 95% for 12 consecutive years, and grew full-year 2025 revenue to $2.896 billion. The stock still fell roughly 56% over the past year.
The lesson isn’t that TTD is a bad business. It’s that even great ad tech businesses can get repriced violently when the competitive narrative shifts. You can read more about TTD’s rocky road in our recent coverage of its recovery attempt.
APP’s Own Filings Flag the Risk
AppLovin itself lists a “competitive advertising ecosystem” and “inability to adapt to emerging technologies and business models” as key risks in its SEC filings. That’s the company acknowledging what Cramer is saying out loud.
APP is up about 19% over the past week but still down roughly 23% year-to-date. The momentum is real. So is the platform risk. Cramer’s point isn’t that AppLovin is broken. It’s that 84% margins in ad tech are a beacon, and Google has never needed an invitation.
