Applovin (APP) has been on a tear since the start of August when the market selloff allowed it to test strong support near its 200 day MA at 60 and now very quickly back to the highs near 90 and up 50% in just three weeks. APP is a $30B ad software platform seeing robust growth with FY24 sales up +35% year over year and still trading at just under 20x earnings. The stock also is now recently eligible for S&P 500 inclusion possibly in the coming Sept and Dec quarterly updates. 

The top growth name in the advertsing software group saw an interesting trade today as a long stock buyer also sold 750 March $110 calls in a buy write at $7.50, and would be willing to be called away at +34% return from here as it stays very strong since its earning report. Also known as a covered call trade, the objective is bullish and wanting upside but an example of a seeing a potential ceiling into that stirke price plus the credit received so in this case about 117.50 as a level of interest. Using a buy write into strength is also a way to hedge as the premium collected from the call sale can be used to cushion a long stock holder if the name pulls back temporarily. APP has seen a ton of longer term opening put sales seeing a floor on dips but this trade and several others point to likely upside into 115-120 going into early 2025. 

BTIG recently raised its target to $114 from $100 and keeps a Buy rating as they note AppLovin is helping engineer growth of overall industy spend, and the firm believes the company can overcome the current inertia with small/mid-size publisher budget increases given room to continue expanding share with large publishers. Hedge fund ownership rose 6%. Lone Pine Capital added 383K shares and now holds over 5.7 million shares in an updated filing.