By Nate Wolf

AppLovin shareholders have one less problem to worry about after a financial publisher retracted all claims about malfeasance at the advertising platform and suspended future updates.

Capitalwatch, an independent researcher, published a report last month claiming AppLovin served as a "laundering machine" for transnational crime syndicates in Southeast Asia. The publisher then retracted specific claims about the role of shareholder Hao Tang, but stood by its skepticism of AppLovin's financial structure.

Capitalwatch has now recanted the entire report, the publisher told Barron's, adding that it would issue "no more news updates" about AppLovin. Capitwalwatch had told Barron's earlier in the week that more "explosive reports" about AppLovin were in the pipeline.

AppLovin sent a cease-and-desist letter to Capitalwatch in January, arguing the publisher's reports contained "absurd and demonstrably false" claims. The company declined to comment on the most recent retraction.

AppLovin stock was up 2.8% to $377.13 on Friday. It tumbled 20% the prior session even after reporting strong quarterly earnings. A mix of short-seller reports, worries about artificial intelligence encroaching on its core game-advertising business, and weakness in tech stocks has weighed on shares.

Those storm clouds may be parting, analysts say. Advertising revenue in the fourth quarter jumped 14% sequentially from the third quarter, ahead of the company's 12% target. Gaming ads likely drove that outperformance, analysts at Morgan Stanley said in a research note.

The firm is keeping an eye on the bear case around AI disruption and competition from dominant players like Meta Platforms. But the company's growing e-commerce ad business remains a potential catalyst for growth. Morgan Stanley reiterated an Overweight rating and lowered its price target to $720 from $800 to reflect a pullback in sector valuations.

"APP's pace of ad targeting innovation over the past three years leaves us constructive on their ability to consistently and meaningfully improve on the performance of the ad network across verticals," the analysts wrote.

BofA Securities trimmed its estimates for the e-commerce channel in the first quarter but still sees upside if spending per day increases more quickly than assumed. The company's dominant gaming ad business provides a strong floor for AppLovin's valuation, the firm said in a research note.

BofA reiterated a Buy rating and reduced its price target to $705 from $780.

Write to Nate Wolf at nate.wolf@barrons.com

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February 13, 2026 11:59 ET (16:59 GMT)

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