Why We're Hedging AppLovin's 80% Margins

AppLovin's 77.7% operating margin looks unbeatable — until you see what Unity Software is building underneath it. We just took a position, and here's the data behind it. Mobile advertising and mobile user acquisition are entering a new competitive phase, and this video breaks down four companies fighting over it: AppLovin (APP), Unity Software (U), Liftoff Mobile (LFTO), and Digital Turbine (APPS). AppLovin has dominated mobile ad tech with industry-leading operating margins near 80%, but revenue growth is decelerating — and that combination is drawing competitors. We use our Compare Companies tool to walk through revenue growth rates, operating margins, and free cash flow trends across all four names, and explain why Unity Software's re-acceleration, expense discipline, and improving GAAP operating margin make it a compelling hedge against AppLovin. We also cover Unity's upcoming Unity 7 platform and the AI-driven "create-then-advertise" flywheel it could unlock for game publishers. This ties into our existing Take-Two Interactive (TTWO) position ahead of Grand Theft Auto VI and NBA 2K27, as we lay out a broader thesis for the video game and mobile gaming industry heading into 2026–2027. If you're weighing AppLovin against its smaller, faster-growing peers, this comparison is for you. If you want the reasoning behind more names like this one, Semiconductor Insider covers the process in more depth. Get access to all our research, weekly live Q&A events, and a growing set of tools to build your process: https://www.chipstockinvestor.com 📰 Why Chip Stock Investor Is Becoming a Software Business: https://chipstockinvestor.com/why-chip-stock-investor-is-becoming-a-software-business/ Linktree for all our socials: https://linktr.ee/chipstockinvestor If you found this video useful, please make sure to like and subscribe! 0:00 - Why Mobile Ad Stocks Matter Right Now 0:45 - Meet the Four: APP, U, LFTO, APPS 1:45 - Revenue Growth: Who's Accelerating, Who's Slowing 2:45