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Piper Sandler has lowered its rating to neutral, signaling that it no longer expects the stock to outperform the broader market. The firm set a price target of $385.

This is the second major firm to step back from a more optimistic view following the latest earnings report. It indicates that some analysts are questioning if the company can maintain its high profit margins as it tries to expand its advertising software beyond mobile games and into the broader e-commerce market.

Source: Piper Sandler

Wells Fargo has moved its rating to equal weight, which means the firm now expects the stock to perform about as well as the rest of the market rather than beating it. This change comes with a new price target of $357.

This shift suggests analysts are taking a more cautious stance after the recent quarterly update. While the company is still a leader in using artificial intelligence to place mobile ads, this downgrade reflects a view that the stock is now fairly valued given its current growth pace.

Source: Wells Fargo

AppLovin reported second-quarter revenue of about 1.92 billion dollars, which was slightly lower than the 1.94 billion dollars analysts expected. While earnings per share of 3.76 dollars matched expectations, the company provided a outlook for the third quarter that was lower than what Wall Street was looking for.

The stock fell about 20 percent following the news. This reaction suggests that because the company is valued at a high price compared to its earnings, any sign that its rapid growth is cooling can lead to a sharp drop. The focus for long-term owners remains on whether the AXON AI engine can continue to win market share in e-commerce to offset any slowdown in its core mobile gaming business.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

The company is scheduled to share its latest performance data today. Analysts are looking for earnings of about $3.76 per share and revenue of roughly $1.94 billion. AppLovin has a history of coming in above expectations, having topped analyst targets in each of the last eight quarters.

Beyond the raw numbers, the focus remains on how well the AXON AI engine is performing. This software predicts which ads users are most likely to click, and its success in moving beyond mobile games into the broader e-commerce market is the primary engine for growth right now.

See the full quarter, and how our tracked metrics did

Key highlights

• Expansion into server management: Lattice completed its $1.65 billion acquisition of AMI, which adds platform firmware and security technology to its chip business. This move is expected to double the company's total addressable market and help it reach a revenue run rate of $1 billion during the third quarter of 2026.
• Strong chip demand: Revenue from the company's core chips grew 62% to $201.1 million, which was better than the top end of what management had previously guided. This growth was driven by record demand for new products used in artificial intelligence servers, which are on track to make up more than 25% of total sales this year.
• Profitability gains: The adjusted EBITDA margin, a measure of core operating profit, rose to 43.0% compared to 34.1% a year ago. This shows the company is successfully growing its sales much faster than its running costs, with adjusted net income more than doubling to $0.53 per share.
• Revenue guidance accelerating: Management expects third quarter revenue to reach between $245 million and $265 million, which includes about two months of contribution from the new AMI acquisition. For the core chip business alone, the company expects 65% growth at the midpoint of its guidance range.

Our take: This was an exceptional quarter where the core business significantly outpaced expectations. The acquisition of AMI is a major strategic shift that pushes the company toward a $1 billion annual scale much faster than planned. These results strengthen the case that Lattice is becoming a vital player in the AI infrastructure market.