AppLovin (APP) Slid Due to Investors' Concerns Over Short Seller's Report

Carillon Tower Advisers, an investment management company, released its “Carillon Eagle Mid Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Mid-cap stocks had a challenging first quarter; the Russell Midcap® Growth Index, which was down 7.12%, had greater difficulties than the Russell Midcap® Value Index, which was down 2.11%. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, Carillon Eagle Mid Cap Growth Fund highlighted stocks such as AppLovin Corporation (NASDAQ:APP). AppLovin Corporation (NASDAQ:APP) develops a software-based platform for advertisers to enhance the marketing and monetization of their content. The one-month return of AppLovin Corporation (NASDAQ:APP) was -2.36%, and its shares gained 262.88% of their value over the last 52 weeks. On April 24, 2025, AppLovin Corporation (NASDAQ:APP) stock closed at $267.88 per share with a market capitalization of $90.641 billion.

Carillon Eagle Mid Cap Growth Fund stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q1 2025 investor letter:

"AppLovin Corporation (NASDAQ:APP) is a platform for mobile application developers to grow their apps through user acquisition, monetization, and analytics. The company continued to report healthy growth and provided guidance indicating robust future growth, thanks to the strong reception of its latest tools by existing customers and its expansion into new verticals. However, post-earnings, shareholders became concerned about a short seller’s report questioning data collection practices. Management addressed these issues thoroughly, but lingering questions and general tariff related news impacting the broader market have compounded concerns."

AppLovin Corporation (NASDAQ:APP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 95 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the fourth quarter compared to 51 in the third quarter. AppLovin Corporation (NASDAQ:APP) reported strong fourth quarter with total revenue increasing 44% year over year to $1.37 billion and adjusted EBITDA increasing 78% to $848 million, achieving a 62% adjusted EBITDA margin. While we acknowledge the potential of AppLovin Corporation (NASDAQ:APP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered AppLovin Corporation (NASDAQ:APP) and shared the list of best aggressive growth stocks to buy. In Q1 2025, ClearBridge Mid Cap Strategy seized the opportunity of the recent market downturn to increase its investment in AppLovin Corporation (NASDAQ:APP). In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.