AppLovin (NASDAQ: APP) on watch amid 3% drop premarket as boutique comments circulate.

• Edgewater reiterates an Overweight view on the stock.
• Firm notes growth normalization: APP's market share (SOW/SOV) is no longer expanding consistently as MAX hits a functional ceiling and competition compresses net revenue spreads.
• Edgewater sees expectations reset: Sell-side forecasts are dropping for 4Q26 and 2027 (with 4Q revenue now modeled at +8-9% q/q) as the company enters a transitional phase.
• Lastly, APP enters a "Show-Me" phase: This reset should ultimately foster healthier Street sentiment by grounding expectations that previously dismissed the law of large numbers.
• "We Sense Competition is Impacting APP’s Net Spreads at the Margin".