Institutional Investors Reassess Positions in High-Flying Applovin Shares

Applovin's stock has been a standout performer this year, delivering substantial gains that have captured the market's attention. However, as the share price hovers near record levels, a divergence is emerging among major institutional investors. Recent activity reveals a split: some pension funds are beginning to lock in profits, while other significant institutions are using any price dips as buying opportunities. All eyes are now turning to London, where company executives face a key test to provide fresh momentum.

A significant event is scheduled for Applovin on Tuesday, December 9. The company is set to present at the "Nasdaq 53rd Investor Conference" in London. Management will participate in a fireside chat at 10:35 AM GMT, offering a direct channel to address European investors.

This appearance follows a robust third-quarter earnings report where the company's earnings per share significantly surpassed analyst forecasts. The primary goal of this engagement is to bolster investor confidence. Market observers are anticipating updates on operational progress and insights into the sustainability of the current growth trajectory.

Major Funds Exhibit Diverging Strategies

The current behavior of large institutional players is particularly noteworthy. Fresh data indicates that CalPERS (California Public Employees Retirement System), the largest U.S. public pension fund, has slightly reduced its stake. The fund divested approximately 2.2% of its holdings—a move often interpreted as portfolio rebalancing following a powerful rally. Despite this reduction, its remaining position, valued at around $146 million, remains substantial.

Should investors sell immediately? Or is it worth buying Applovin?

Conversely, this selling pressure is being met with buying interest from other quarters. Reports suggest institutions like Norges Bank have recently increased their positions. This clear divergence in strategy underscores a lack of consensus among professional investors regarding the stock's short-term potential at its current valuation.

Technical Indicators Signal Overbought Conditions

The equity is currently trading at €597.70, placing it within striking distance of its 52-week peak. Its year-to-date advance of nearly 80% is undeniably impressive but has created an extreme technical setup. The Relative Strength Index (RSI) is reading above 90, a level that traditionally signals severely overbought conditions and potential overheating.

Consequently, investors are advised to monitor tomorrow's London event closely. Should management present a compelling case for continued growth, it could provide the necessary catalyst to challenge all-time highs once more. However, in the absence of positive news, the extreme overbought readings on key indicators increase the likelihood of a near-term consolidation or pullback.