Analysis of Recent Negative Sentiment Surrounding AppLovin (APP)

 

Executive Summary

AppLovin (NASDAQ: APP) has experienced a period of negative sentiment in recent weeks, specifically from May to early July 2025. This downturn in investor perception is primarily attributable to a confluence of factors. Foremost among these are aggressive short-seller reports that levied serious allegations of undisclosed Chinese ties, exploitation of advertising data (including from Meta Platforms), and manipulative ad practices such as "backdoor installations" and inflated metrics. These widely publicized reports directly impacted investor confidence. Complementing this, the emergence of shareholder class-action lawsuits, which echo many of the short-seller accusations concerning misleading statements about AppLovin's AXON 2.0 platform and deceptive advertising techniques, introduced significant legal and reputational risks. Further contributing to the negative sentiment was AppLovin's non-inclusion in the S&P 500 Index in June 2025. Despite meeting quantitative criteria, this non-inclusion was reportedly due to qualitative concerns, including the ongoing legal battles, disappointing investors and triggering stock sell-offs.   

Returns: APP vs S&P 500

These negative developments occurred despite several counterbalancing factors. AppLovin demonstrated robust financial performance in Q1 2025, showcasing significant growth in its core advertising segment. The company also successfully completed the strategic divestment of its mobile gaming business, a move intended to streamline operations and intensify its focus on the high-margin, AI-powered ad-tech platform, AXON 2.0. Analyst sentiment, while acknowledging the recent volatility, largely remains positive, with many viewing the recent dips in the stock as a strategic buying opportunity.   

The overall implication of these dynamics is that the recent negative sentiment reflects a complex battle of narratives. On one side are serious allegations challenging the company's integrity and operational ethics, while on the other are strong operational performance and a clear strategic direction. The resolution of the legal disputes and the company's continued execution of its core ad-tech strategy will be critical in shaping future investor perception and determining the long-term trajectory of its stock.

  

Introduction

AppLovin Corporation (NASDAQ: APP) operates as a prominent marketing platform, delivering comprehensive software and AI solutions designed to assist businesses of varying sizes in connecting with their target customers, monetizing their digital content, and expanding their global audiences. The company's strategic emphasis has increasingly shifted towards its proprietary AI-powered ad-tech platform, AXON. This report aims to provide a concise yet comprehensive analysis of the specific factors that have contributed to the negative sentiment surrounding AppLovin, focusing on events and market reactions observed within the timeframe of May to early July 2025. This analysis will explore the interplay of various drivers and counterpoints, offering a nuanced understanding of the recent market dynamics.   

To provide a clear chronological context for the events influencing AppLovin's sentiment during the specified period, the following table outlines key announcements and their immediate market or sentiment impacts. This structured overview allows for a rapid grasp of the sequence of events, which is essential for understanding the subsequent detailed analysis of the drivers behind the negative sentiment.

Table 1: Key Events Timeline (May-July 2025)

Date	Event Description	Impact on Stock/Sentiment
May 7, 2025	AppLovin announces agreement to sell mobile gaming business to Tripledot Studios for $400M + equity	Positive initial reaction, signaling strategic pivot
May 7, 2025	AppLovin delivers strong Q1 2025 results, exceeding expectations	Shares soared over 14% in after-hours trading
May 8, 2025	Shares jump 11.9% following Q1 earnings beat and gaming divestiture announcement	Continued positive momentum
June 9, 2025	AppLovin not included in S&P 500 in latest index rebalancing	Shares plunged 8.2%, disappointing investors
June 18, 2025	Selling pressure intensifies amid S&P 500 non-inclusion and valuation concerns	Stock dropped 4.5%
June 20, 2025	Negative sentiment persists from index non-inclusion and renewed scrutiny over China ties	Stock fell 5.7%
June 27, 2025	Profit-taking sets in after analyst upgrades and volatile week	Shares dropped 3.9%
June 30, 2025	AppLovin completes sale of mobile gaming business to Tripledot Studios	Streamlines company to core business, allows focus on ad-tech
July 1, 2025	AppLovin announces completion of gaming business sale	Official announcement of completed divestment
July 2, 2025	AppLovin sets Q2 2025 earnings call date for August 6, 2025	Standard corporate announcement, no immediate sentiment shift

Key Drivers of Negative Sentiment

Impact of Short-Seller Reports

A significant source of negative market sentiment for AppLovin has been a series of highly critical reports published by prominent short-seller firms, including Culper Research, Fuzzy Panda Research, and Muddy Waters. These reports, which emerged primarily in late February and March 2025, leveled serious accusations against AppLovin, alleging fraudulent and deceptive business practices.   

Specific Accusations

Alleged Chinese Connections: Culper Research's report specifically raised concerns about "covert Chinese ownership and operations" within AppLovin. This included claims of substantial equity investment by a Chinese national, Hao Tang, who was alleged to possess "extensive direct and indirect ties to Chinese espionage, [Chinese Communist Party] state-sponsored propaganda, human trafficking, and money laundering operations". The report also expressed apprehension regarding AppLovin's purportedly "undisclosed partnerships with two companies in the Asian country," suggesting these connections posed significant "concerns for shareholders but for national security and data security". These allegations are particularly impactful because they transcend typical business model critiques, directly tapping into sensitive geopolitical and national security anxieties. The suggestion that AppLovin's operations or ownership might be compromised by foreign espionage or illicit activities creates a profound level of perceived risk for investors. This is not merely a question of financial performance but touches upon regulatory scrutiny, the potential for government intervention (especially given AppLovin's stated aim to acquire TikTok's ex-China operations), and a severe erosion of trust, which can lead to a significant and sustained discount in valuation, particularly for a technology company handling sensitive user data.   

Manipulative Ad Practices & Data Exploitation: Short-sellers asserted that AppLovin engaged in manipulative practices designed to inflate its metrics. This included claims of a "backdoor installation scheme" where AppLovin allegedly exploited app permissions to "force-feed silent, backdoor app installations directly onto users' phones, with just a single click". This practice was said to trick users into installing applications without their explicit consent, thereby "inaccurately inflat[ing] installation numbers, and, in turn, its profit figures". Accusations extended to artificially inflating ad click-through and app download rates, purportedly achieved through methods like "ads click[ing] on themselves" or utilizing "design gimmicks to trigger forced shadow downloads".   

Furthermore, reports alleged that AppLovin was "reverse engineering and exploiting advertising data from Meta Platforms". Muddy Waters specifically accused AppLovin of "misappropriating data and violating key partner platforms' terms of service" by collecting and structuring user IDs from major platform partners, raising concerns that such practices could lead to AppLovin's services being blocked by partners or boycotted by clients. A particularly damaging claim by Fuzzy Panda Research stated that their tests on children's devices "uncovered AppLovin serving sex ads to 7-12-year-old girls". These allegations, if substantiated, represent fundamental breaches of ethical advertising standards and potentially severe violations of data privacy regulations. Beyond immediate financial penalties, such practices could lead to platform de-listing (e.g., from Apple's App Store or Google Play, as hinted in ), significant regulatory fines (especially given the intensifying privacy enforcement globally ), and a catastrophic loss of trust from advertisers and publishers. The accusation of targeting children is particularly egregious and could invite intense public outcry and severe legal repercussions, directly challenging the integrity and sustainability of AppLovin's core business model.   

AppLovin's Response and Counter-Narrative

AppLovin's CEO, Adam Foroughi, has vehemently denied these allegations, characterizing the short-seller reports as "false and misleading," "nefarious," and "littered with inaccuracies and false assertions". He asserted that these reports were primarily aimed at "driving down our stock price for their own financial gain". Foroughi specifically refuted claims of tracking children's data, possessing the capability to access competitors' bid data, and any financial or accounting improprieties, stating these claims were "factually incorrect and have no basis whatsoever". The company noted that the short reports were strategically timed to emerge shortly after their earnings report, a period during which they were restricted from responding with immediate financial performance updates. In a proactive move, AppLovin announced it had retained the law firm Quinn Emanuel Urquhart & Sullivan to investigate trading activity surrounding the short-seller reports, signaling a strong intent to legally defend its reputation and operations.   

A counter-narrative, notably from a Hackernoon article, argued that the short-sellers fundamentally misunderstood AppLovin's sophisticated AI technology (AXON) and standard performance marketing practices. This perspective contended that the company's pixel was designed to operate effectively in privacy-first environments (post-IDFA) without relying on device IDs, and that there was no substantive evidence of platform backlash from major players like Apple or Google. This counterpoint also clarified that reported churn in e-commerce advertisers was due to AppLovin's recent entry into that market, not client dissatisfaction. The robust and multi-pronged rebuttal from AppLovin, encompassing direct denials, legal action, and detailed technical counter-arguments, highlights a fierce ongoing battle for narrative control. The fluctuating market response suggests that investors are actively weighing these conflicting claims, creating a state of significant uncertainty, which itself contributes to negative sentiment as investors typically prefer clarity and predictability.   

Table 2: Summary of Short-Seller Allegations

Short-Seller Firm	Key Allegations	AppLovin's Response (Summary)
Culper Research	Covert Chinese ownership/operations, ties to espionage, undisclosed partnerships	Denied, called "false and misleading," "nefarious," "littered with inaccuracies and false assertions"
Fuzzy Panda Research	Manipulative ad practices ("backdoor installations," inflated metrics), exploiting Meta data, targeting children with inappropriate ads	Denied, called "false and misleading," "nefarious," "littered with inaccuracies and false assertions." Specifically refuted tracking children's data and financial improprieties
Muddy Waters Research	Misappropriating data, violating partner platform terms of service (e.g., collecting user IDs), "scammy" practices	Denied, called "false and misleading," "nefarious," "littered with inaccuracies and false assertions." Stated AXON was built to work without device IDs and no sign of platform backlash
All	Driving down stock price for own financial gain	Hired law firm Quinn Emanuel Urquhart & Sullivan to investigate trading activity

Shareholder Class-Action Lawsuits

The serious allegations initially made by short-sellers quickly escalated into formal legal challenges, intensifying the negative sentiment surrounding AppLovin. The law firm Robbins Geller Rudman & Dowd LLP announced a class-action lawsuit, Quiero v. AppLovin Corporation, Inc., on April 25, 2025, targeting purchasers or acquirers of AppLovin securities between May 10, 2023, and February 25, 2025. Separately, the shareholder rights law firm Johnson Fistel, PLLP, announced its own investigation and cited a class-action lawsuit filed on March 5, 2025, in the U.S. District Court for the Northern District of California.   

The core allegations within these lawsuits largely mirror the accusations initially brought forth by the short-sellers. They contend that AppLovin created a "false impression" regarding the capabilities of its enhanced AXON 2.0 digital ad platform and its "cutting-edge AI technologies," suggesting these would efficiently match advertisements and facilitate expansion into web-based marketing and e-commerce. However, the complaints assert that AppLovin was, in fact, "exploiting advertising data from Meta Platforms" and employing "manipulative practices". These allegedly included a "backdoor installation scheme" that forced unwanted apps onto customers, thereby "inaccurately inflat[ing] installation numbers and, in turn, its profit figures". The lawsuits further claimed AppLovin utilized methods such as "ads click[ing] on themselves" or "design gimmicks to trigger forced shadow downloads" to artificially inflate ad click-through and app download rates.   

The market reacted negatively to the formalization of these claims. Upon the emergence of analyst research reports detailing these allegations on February 26, 2025, the price of AppLovin shares reportedly fell by more than 12%. The transition from speculative short-seller reports to formal class-action lawsuits represents a significant escalation of risk for AppLovin. This shifts the challenges from public relations and market perception to tangible legal battles, which entail substantial legal costs, potential damages, and a considerable distraction for management. Even if the company ultimately prevails, the prolonged uncertainty and legal process can weigh heavily on investor sentiment and stock performance, contributing to sustained negative pressure. This legal exposure is not isolated; the fact that AppLovin's non-inclusion from the S&P 500 was partly attributed to "unresolved legal battles" directly connects these lawsuits to another significant negative market event. This demonstrates how various negative narratives and events can compound, with one issue (allegations) leading to another (lawsuits), which then contributes to broader market-level setbacks (index non-inclusion). This compounding effect amplifies the overall negative sentiment, creating a perception of a company facing multiple, interconnected challenges.   

S&P 500 Index Non-Inclusion

AppLovin experienced a notable blow to investor sentiment in June 2025 when it was not included in the S&P 500 index during the latest quarterly rebalancing, despite investors anticipating its inclusion. This decision particularly disappointed investors who had widely anticipated the company's inclusion, leading to a sharp 8.2% plunge in shares on June 9, 2025.   

The reasons for non-inclusion are significant. Despite meeting the quantitative criteria for S&P 500 inclusion, such as a market capitalization exceeding $20.5 billion (AppLovin's market cap was reported at $110 billion in ), positive earnings, and sufficient liquidity, the S&P 500 committee's decision not to include AppLovin was reportedly based on "qualitative concerns". These concerns specifically included "unresolved legal battles," referring to the ongoing class-action lawsuits alleging misleading statements and deceptive practices. The market impact was immediate and sustained; the non-inclusion triggered selling pressure, contributing to a 5.7% stock fall on June 20 and a 4.5% drop on June 18. This negative sentiment persisted, fueled by renewed scrutiny over the company's alleged China ties and concerns about its premium valuation.   

S&P 500 inclusion is typically a significant positive catalyst for a stock, as it triggers mandatory buying by passive index funds and can substantially boost investor confidence. Its non-inclusion, particularly when qualitative reasons tied to legal and ethical concerns are cited, sends a strong negative signal to a broad base of investors. This can lead to sustained selling pressure from index funds divesting their holdings and a reluctance from new investors to enter, even if the company's fundamentals appear strong. The S&P committee's decision not to include AppLovin based on qualitative concerns, despite its robust financial performance, indicates that influential market gatekeepers perceive the ongoing legal and ethical allegations as material and significant risks. This suggests that the market is assigning a higher perceived risk profile to AppLovin, which can depress its valuation multiple compared to peers, even those with similar growth trajectories. This situation highlights that integrity and governance issues can outweigh strong financials in investor perception, contributing to a deeper and more entrenched negative sentiment.   

Contextual Factors and Counterpoints

Despite the significant negative sentiment drivers, several factors provide an important counterpoint, suggesting a more nuanced view of AppLovin's position.

Strategic Pivot and Gaming Business Divestment

AppLovin successfully completed the sale of its mobile gaming business to Tripledot Studios. The transaction, initially announced on May 7, 2025, for $400.0 million in cash and an equity consideration representing approximately 20% ownership in Tripledot, officially closed on June 30, 2025. This divestment included 10 game studios and their popular mobile gaming franchises.   

AppLovin's CEO, Adam Foroughi, articulated that this sale "streamlines the Company to its core business and allows us to fully focus on the exciting opportunities that will shape and define the future of our company". This strategic move represents a decisive pivot towards becoming a "pure-play leader in AI-powered advertising". The gaming division had significantly lower margins (19% Adjusted EBITDA margin in Q1 2025) compared to the advertising segment (81% Adjusted EBITDA margin in Q1 2025), indicating that the divestiture is expected to substantially improve overall company profitability and allow for concentrated resource allocation to the higher-margin AI-driven ad-tech business. The $400 million cash infusion, combined with $1.2 billion in share buybacks during Q1, also signals a commitment to shareholder-friendly capital allocation policies.   

While many analysts generally view this divestiture as a positive strategic shift, enhancing focus and profitability, some acknowledge potential risks. These risks primarily revolve around relying more heavily on a single core marketing platform without the diversification previously provided by the gaming business. However, the retained 20% equity stake in Tripledot Studios offers AppLovin a continued, albeit indirect, exposure to the gaming industry's growth, mitigating some diversification concerns. This divestment, while strategically sound for focusing on higher-margin ad-tech and AI, inherently involves a trade-off. It provides strategic clarity and enhances profitability, but it also removes a layer of business diversification. In a dynamic and sometimes volatile ad-tech market, some investors might prefer a more diversified portfolio, which could contribute to mixed sentiment or caution. The market's initial positive reaction to the divestiture announcement on May 8, 2025 , suggests that the strategic clarity was initially well-received, but subsequent negative events (short-seller reports, S&P non-inclusion) overshadowed this strategic positive.   

Strong Q1 2025 Financial Performance

AppLovin reported exceptionally strong first-quarter 2025 financial results, which serve as a significant counterpoint to the recent negative sentiment. The company's total revenue increased by a robust 40% year-over-year, reaching $1.48 billion. More importantly, advertising revenue, which is the company's core and now streamlined focus, demonstrated remarkable growth of 71% year-over-year, totaling $1.16 billion. Net income surged by an impressive 144% to $576 million. The advertising segment, post-divestiture, showcased robust profitability with an Adjusted EBITDA margin of 81%.   

The company generated substantial cash flow during the quarter, with $832 million in net cash from operating activities and $826 million in Free Cash Flow. AppLovin also actively returned capital to shareholders by repurchasing $1.2 billion worth of its Class A common stock.   

Despite the market headwinds, major brokerages have maintained or raised their price targets for AppLovin, with some now exceeding $500, following the gaming arm sale and strong Q1 results. The average analyst rating is a "Moderate Buy," reflecting high expectations for earnings expansion. Zacks, for instance, rates APP as a "Strong Buy," citing robust earnings growth and substantial upward revisions to estimates (nearly 30% across various timeframes). Many analysts view the S&P non-inclusion as a "temporary setback" rather than a "structural flaw," presenting a "strategic buying opportunity".   

The stark contrast between AppLovin's exceptionally strong Q1 2025 financial performance (particularly its advertising revenue growth and high margins) and the recent negative sentiment highlights a significant disconnect. This suggests that the negative sentiment is largely driven by non-financial, qualitative factors (e.g., short-seller allegations, class-action lawsuits, S&P index non-inclusion) rather than a deterioration of the company's core business fundamentals. This disconnect could imply an overreaction by the market to the controversies, potentially creating a "buy the dip" scenario for long-term investors who prioritize fundamental strength, as suggested by several analyst reports.   

Table 3: AppLovin Q1 2025 Financial Highlights

Metric	Q1 2025 Value (in thousands)	Q1 2024 Value (in thousands)	Year-over-Year % Change
Total Revenue	$1,484,021	$1,058,115	40%
Advertising Revenue	$1,158,974	$678,370	71%
Apps Revenue	$325,047	$379,745	(14%)
Net Income	$576,419	$236,183	144%
Advertising Adjusted EBITDA	$943,228	$492,020	92%
Total Adjusted EBITDA	$1,005,027	$548,771	83%
Net Cash from Operating Activities	$832,000	N/A	N/A
Free Cash Flow	$826,000	N/A	N/A

Comparison to Competitors (Q1 2025 Revenue)

To further contextualize AppLovin's performance, a comparison with key competitors in the digital advertising and mobile technology space for Q1 2025 revenue is provided:

• AppLovin (Advertising Revenue): $1.16 billion, representing a significant 71% year-over-year growth. This highlights the strong momentum in its core ad-tech business.   

• Meta Platforms (Advertising Revenue): Approximately $41.4 billion, with a 16% year-over-year increase. Meta's advertising business remains robust, driven by increased ad impressions and average ad prices.   

• Google (Alphabet Total Revenue): $90.2 billion, reflecting a 12% year-over-year increase, with contributions from Google Search, YouTube, and Network ads.   

• Unity Technologies (Total Revenue): $435 million, showing a 6% year-over-year decrease. Its Grow Solutions revenue, which includes monetization tools, was $285 million, down 4% year-over-year.   

• IronSource: Direct comparative Q1 2025 earnings data for IronSource was not available within the provided research material.

This comparison underscores that AppLovin's advertising revenue growth rate significantly outpaced that of major industry players like Meta and Google, and it contrasts sharply with the revenue decline experienced by Unity Technologies. This reinforces the view that the negative sentiment surrounding AppLovin is specific to the controversies it faces rather than a reflection of broader industry weakness impacting its operational performance.

Broader Mobile Advertising Industry Challenges

The mobile advertising industry is currently navigating a "critical phase" in 2025, characterized by increasingly stringent enforcement of privacy regulations. These include established frameworks like GDPR in Europe, new U.S. state laws (e.g., Delaware, Iowa, Nebraska, New Hampshire, and New Jersey enacted in January 2025, with more to follow), and frameworks such as the Multi-State Privacy Agreement (MSPA). Regulatory bodies are demonstrating an intensified willingness to impose fines and sanctions for data law violations, compelling advertisers to adopt transparent data collection methods and publishers to implement privacy-first strategies. Furthermore, Apple's App Tracking Transparency (ATT) framework and Google's ongoing plans to phase out third-party cookies continue to reshape user tracking capabilities and emphasize consumer control over personal data.   

Beyond privacy, ad fraud remains a persistent and evolving challenge, with fraudsters increasingly exploiting AI and automation to bypass traditional detection methods, leading to more sophisticated fake clicks and impressions. Concurrently, accurate cross-device tracking—essential for comprehensive user journey analysis—is becoming progressively difficult due to heightened privacy constraints and the absence of universal identifiers across devices. The prevailing economic volatility in 2025 could also result in tighter advertising budgets across industries. This environment intensifies advertisers' demands for greater accountability and clearer performance metrics from their ad-tech partners, putting pressure on companies like AppLovin to demonstrate tangible value.   

AppLovin's Strategic Positioning and Response

AppLovin's core strategy is built around its AXON platform, an AI-powered ad management system explicitly designed to be privacy-compliant and effective in this evolving regulatory landscape. The company asserts that AXON was "built to work after Apple nuked IDFA" and "never needed device IDs," enabling it to make intelligent predictions and optimize campaigns with limited user data. The company is strategically focusing on AI-driven predictive marketing, expanding into e-commerce mobile advertising, and scaling creative strategies to combat ad fatigue, all aimed at navigating the industry's complexities. AppLovin highlights its end-to-end solutions (covering both user acquisition and monetization) as a "moat" against rivals, leveraging its extensive network effects and scale. To maintain its competitive edge in an intensely competitive market, AppLovin aims to differentiate itself through continuous innovation, superior customer service, and strategic acquisitions.  

The mobile advertising industry is facing fundamental, systemic challenges related to privacy, data access, and fraud. AppLovin's strategic pivot to AI-driven ad-tech (AXON 2.0) and its divestment of gaming are directly aligned with adapting to and thriving within these industry headwinds. This suggests that, in theory, AppLovin is making sound strategic moves to future-proof its business. However, the short-seller allegations directly contradict AppLovin's claims of privacy compliance and ethical data handling. This creates a critical point of contention for investors: Is AppLovin genuinely a leader adapting to the privacy-first future, or is it resorting to illicit means to circumvent these changes? This fundamental uncertainty about the legitimacy of its core technology, despite the company's stated strategy, is a significant contributor to the negative sentiment.  

Conclusion

The negative sentiment surrounding AppLovin in recent weeks is a complex interplay of serious allegations from short-sellers, the formalization of these claims into class-action lawsuits, and the market's disappointment and subsequent sell-off following the company's non-inclusion in the S&P 500 index. These events have collectively created significant uncertainty, legal exposure, and reputational pressure for the company.

Crucially, these negative drivers exist in stark contrast to AppLovin's strong underlying business performance. The company reported exceptionally robust Q1 2025 financial results, particularly in its core advertising segment, demonstrating significant revenue growth and high profitability. Furthermore, the strategic divestment of its mobile gaming business is a deliberate and analyst-supported move to streamline operations and intensify focus on its high-margin, AI-powered ad-tech platform, a strategy generally viewed positively for long-term growth and efficiency.

The prevailing negative sentiment is therefore less about a deterioration of AppLovin's fundamental financial health or strategic direction, and more about the credibility of the serious allegations of deceptive practices and undisclosed ties. The market is grappling with conflicting narratives: a company presenting strong reported financials and a clear strategic vision versus persistent accusations of unethical and potentially illegal business conduct. This creates a high degree of volatility and investor caution, as the market seeks clarity on the veracity of the claims and their potential long-term implications.

Outlook

The near-term outlook for AppLovin remains characterized by volatility as the market continues to process these complex and often contradictory dynamics. However, several key catalysts could influence a shift in sentiment:

Resolution of Legal and Regulatory Disputes: The resolution of the ongoing legal and regulatory disputes will be a critical determinant of future sentiment. A favorable outcome for AppLovin or a clear, verifiable rebuttal of the short-seller allegations could significantly alleviate investor concerns and allow the market to re-focus on the company's strong fundamentals and strategic pivot. Conversely, adverse legal developments would likely exacerbate negative sentiment and prolong the period of uncertainty.

Execution of Ad-Tech Strategy: Continued strong performance and meticulous execution in the AI-driven ad-tech segment (AXON 2.0), particularly in expanding into new growth areas like e-commerce and Connected TV (CTV), will be vital. Demonstrating sustained, compliant growth and profitability in this core business, especially within the challenging privacy-first mobile advertising landscape, will be crucial to rebuilding and reinforcing investor confidence.

Potential S&P 500 Inclusion: While not included in June 2025, a successful resolution of its legal issues could pave the way for future S&P 500 inclusion, potentially by mid-2026. Such an event would trigger significant passive fund inflows and a positive re-rating of the stock, providing a strong tailwind.   

Overall, if the legal cloud lifts and the company consistently delivers on its strategic vision and strong financial performance, there is significant upside potential, as suggested by many analysts who view the current dip as a buying opportunity. The market's current assessment appears to heavily discount the company's operational strengths due to the severity of the allegations, creating a potential opportunity if these concerns are effectively addressed.