Main Street Capital stock price did modestly well this year as other companies in the business development companies (BDC) industry accelerated.

Main Street Capital beat other BDCs this year

It had a total return of 8.9% this year, while the closely-watched VanEck BDC Income ETF (BIZD), which tracks the biggest companies in the industry, dropped by 5.9%.

Main Street Capital vs BIZD vs VOO | Source: Seeking Alpha

Main Street Capital stands out because of its premium to NAV, which has jumped to 80% much higher than of other BDCs by companies like Prospect Capital, Blue Owl, Goldman Sachs, New Mountain, and Oaktree, which are all trading with negative NAV multiples.

While Main Street Capital stock has largely avoided the turmoil that has happened in the industry, it has pulled back in the past few months, moving from the year-to-date high of $66 in August to the current $59.

The ongoing weakness in the BDC industry has occurred as the Federal Reserve has started cutting interest rates. This trend will continue in the coming year as Donald Trump replaces Jerome Powell with a more accommodative central bank governor.

BDC companies face a major challenge in a low-interest environment because they specialize in making loans to other companies, especially those with junk credit ratings.

The crisis then escalated in the summer when a $14 billion fund managed by KKR published weak financial results as some of its loans backfired. Today, FS KKR trades at a 35% discount to its NAV, with its dividend yield soaring to 19%, much higher than Main Street Capital’s 7.18%.

The crisis then escalated as the issues at Blue Owl came to light. This crisis started when Blue Owl announced a plan to merge one of its private funds with another publicly traded one, a move that would have negatively impacted investors in its private fund. 

Main Street Capital business is doing much better than other BDCs

The most recent results showed that Main Street Capital’s business was doing relatively well.

These numbers showed that its interest income dropped to $103.28 million in the last quarter from the $110 million it made in the same period last year as interest rates declined.

At the same time, its dividend income rose to over $31.2 million, which helped to push its total investment income to $139.8 million from the previous $136 million. Its total investment income before taxes rose to $86 million.

The company also has a solid balance sheet, with over $5.2 billion in total assets and $2.3 billion in total liabilities, numbers that have helped it beat other companies in the industry. 

Also, unlike other companies, Main Street Capital’s business is internally managed, meaning that it does not need to pay external management fees. This is unlike other popular BDC companies that pay external managers. As a result, its operating expenses are at or less than 2% of the assets.

Main Street Capital stock price technical analysis

MAIN stock chart | Source: TradingView

The daily timeframe chart shows that the MAIN stock price formed a double-bottom pattern at $54.50 and rebounded. It then rebounded to a high of $62.82 and is now about to retest the neckline at $59. A break-and-retest is one of the most common bullish continuation patterns in technical analysis.

The stock has remained between the 23.6% and 38.2% Fibonacci Retracement levels. It has remained above the 50-day and 100-day moving averages.

Therefore, the break-and-retest pattern points to more upside in the coming weeks. Such a move will push it to the December high of $62.82. Crossing that resistance level will point to more gains, potentially to the year-to-date high of $66.

READ MORE: Main Street Capital stock: beating BDCs and S&P 500, but there’s a catch

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Canada’s TSX Composite Index has had a great performance this year, as it outperformed the S&P 500 and Nasdaq 100 indices. It jumped by ~30% this year, while the two blue-chip indices rose by 20.5% and 16.5%, respectively. 

TSX Composite Index boosted by soaring commodity prices

The TSX Composite Index soared to a record high this year despite the trade conflict between the United States and Canada. This conflict saw the US implement large tariffs against Canadian goods not covered by the USMCA deal, which he negotiated in his first term.

The main reason why the index did so well is that it is made up of many companies in the gold and silver mining industries, which have benefited as the prices jumped to a record high.

Index, a closer look at its top gainers shows that they are all in this industry. Discovery Silver Corp’s stock jumped by 1,777% as the price of silver soared. 

READ MORE: Top 5 reasons gold price is on a relentless bull run

Aris Mining, G Mining, Lundin Gold, New Gold, Oceanagold, DPM Metals, and Allied Gold Corporation stocks jumped by over 230% this year, and were the best performing in the index.

The other top companies in the index were firms like IAMGOLD, Visla Silver Corp, Silvercorp, and Barrick Mining Corporation.

Gold and silver prices jumped for three main reasons. First, Donald Trump’s policies pushed investors to embrace safe-haven assets like gold and the Swiss franc. 

Second, gold experienced strong demand from both countries and companies, with Tether leading the acquisition spree. Countries like China and Russia continued buying gold as part of their diversification strategy. Silver jumped because of its close correlation with gold.

Third, the gold and silver jumped as investors reacted to the actions of the Federal Reserve, which slashed interest rates three times this year, and most recently, it restarted its quantitative easing policy. Officials have hinted that the bank will cut rates in 2025.

Bank of Canada interest rate cuts

The TSX Composite Index jumped as the Bank of Canada (BoC) slashed interest rates several times this year, bringing the benchmark rate to 2.5% as inflation dropped to its target range. The cuts helped to boost the economy, which expanded by 2.3% in the third quarter of the year.

Still, Canada’s bond yields have held steady in the past few months, a sign that analysts expect the bank to hold rates steady. The yield of the ten-year government bonds jumped to 3.50%, its highest level since September this year. It has risen by over 14% from its lowest level in October.

The TSX Composite Index has done well because of the ongoing AI boom, which has helped boost some of its constituent companies. For example, companies like Bitfarms, Shopify, and Celestica.

Will the TSX Index continue soaring in 2026?

The TSX Composite Index’s performance in 2025 will depend on the performance of gold, silver, and other metals. A continuation of this year’s rally will boost these mining stocks. However, chances are that silver and gold will moderate next year.

Technical analysis suggests that the index has momentum today. It has remained solidly above the 50-day and 100-day Exponential Moving Averages, which have provided it with substantial support.

The Relative Strength Index has continued rising and is nearing the overbought level of 70. Therefore, the most likely scenario is where it continues rising, with the next key resistance level being at $32,500. 

However, a pullback cannot be ruled out in the coming year, especially if gold and silver prices drop.

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The Australian dollar continued its strong uptrend this week, reaching its highest point in over a year amid odds of divergence between the RBA and the Federal Reserve interest rates. The AUD/USD pair jumped to a high of 0.6710, up by 13.4% from its lowest point this year.

RBA and Federal Reserve divergence

The AUD/USD exchange rate jumped as investors predicted that the Federal Reserve and the Reserve Bank of Australia (RBA) would continue to diverge in the coming year.

On the one hand, economists believe that the Federal Reserve will continue cutting interest rates in the coming year. In a statement on Tuesday, Trump hinted that he will only nominate a Fed Chair who will be willing to cut interest rates even as the economic strength continues.

His statement was a reaction to the strong US GDP data released by the Bureau of Economic Analysis (BEA) on Tuesday. That report showed that the economy expanded by 4.3% in Q3, helped by robust consumer spending and AI investment.

That growth was much higher than what analysts were expecting by far, meaning that the economy continued to defy gravity this year  

However, more data sent a warning about the economy. A good example of this is the consumer confidence report by the Conference Board.

The report showed that the country’s consumer confidence dropped sharply this month, continuing a trend that has been going on in the last five months. This is an important number because consumer spending is the biggest part of the GDP.

Wall Street analysts and Polymarket traders expect that the Federal Reserve will cut interest rates at least two times in 2p26

On the other hand, analysts are pricing in potential interest rate cuts by the Reserve Bank of Australia next year after recent data showed that inflation continued rising.

Minutes released on Tuesday showed that officials deliberated on whether to hike interest rates or not. They opted to leave rates unchanged at 3.6% so that they can observe inflation trends in the country.

Economists at some of the biggest Australian banks have a mixed opinion on what to expect next year. Belinda Allen, a top economist at CBA predicted that the bank will hike rate next year.

On the other hand, Luci Ellis, a senior analyst at Westpac, sees the bank leaving rates unchanged for an extended period, a move that the bond market supports. Data shows that the ten-year bond yield dropped to 4.75% on Wednesday from this week’s high of 4.83%. The five-year yield dropped slightly to 4.28%.

AUD/USD technical analysis 

The daily timeframe chart shows that the AUD/USD exchange rate has been in a strong bull run this year, moving from a low of 0.5912 in April to the current 0.6700, its highest level in over a year.

It flipped the important resistance level at 0.6685, its highest point in April into a support level. The pair remains above the 50-day and 100-day Exponential Moving Averages (EMA).

Also, it remains slightly above the Supertrend indicator, a sign that bulls are in control for now. Therefore, the most likely AUD/USD forecast is bullish, with the next key target being the psychological level at 0.6800.

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The Nifty 50 Index rose and is hovering near its record high, while Indian bond yields rallied after a major statement from the Reserve Bank of India (RBI). It has jumped by 10.9% this year and by 20% from its lowest point this year. 

RBI launches “shock-and-awe” plan

The blue-chip Nifty 50 Index rose after the RBI launched the “shock-and-awe” approach to boost liquidity in the financial system. Similarly, the country’s bond market continued doing well, with the ten-year yield dropping to 6.57% from this week’s high of 6.70%.

The shorter-term 5-year yield dropped to 6.353% from its weekly high of 6.47%. At the same time, the Indian rupee softened a bit, with the USD/INR pair rising to 89.6850 from this week’s low of 89.27. 

This price action happened after the RBI announced that it will buy 2 billion rupees or $22 billion of bonds in four tranches this month and in January. It will also hold a $10 billion foreign exchange currency swap in January this year.

These actions are a continuation of the measures announced earlier this month. The bank hopes that they will help to offset the cash drain that happened recently when it moved to support the currency. That move led to a dip in system liquidity, with the bank deficit rising to 727 billion rupees.

The Nifty 50 Index reacted to a court ruling in the United States that upheld Donald Trump’s decision to boost the H1-B visa fee to $100,000 a move that will affect India. India has a 70% market share of the Visa program, with companies like Tata Consultancy, Wipro, and Infosys having a big market share. 

A major issue for the Nifty 50 Index this year has been the ongoing trade conflict between India and the United States. Trump has applied a 50% tariff on all goods from India, a move that has affected many constituent companies. These tariffs have contributed to its underperformance compared to other global indices like the TSX Composite and the S&P 500 Index.

Top gainers and laggards among Indian stocks this year

Most companies in the Nifty 50 Index were in the green, although gains were less pronounced than in other global indices. 

The top gainers in the index were companies like Shriram Finance, Maruti Suzuki, Bajaj Finance, Eicher Motors, SBI Life Insurance, and Hindalco Industries. All these stocks soared by over 44% this year, helped by their domestic focus and strong financial results. 

On the other hand, the top laggards in the Nifty 50 Index were companies like Trent, Tata Motors, Tata Consultancy, Power Grid, Infosys, ITC, and Wipro. Tata Motors shares dropped because of a major hack that stalled its Jaguar Land Rover business. 

Consulting companies like TCS, Infosys, and Wipro stocks have dropped because of the H1-B visa program.

Nifty 50 Index technical analysis 

The daily chart shows that the Nifty 50 Index has done well in the past few months and is now hovering near the year-to-date high of ₹26,317. It has formed an ascending channel and is nearing the upper side. 

The index has remained above the 50-day and 100-day moving averages. It is also above the Supertrend indicator and the Ichimoku cloud.

Therefore, the Nifty 50 Index will likely continue rising as bulls target the next key resistance at ₹26,400. 

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Pi Network, a crypto project that was meant to disrupt the industry, has become one of the biggest flops in 2025 as it plunged from a record high of $3 in February to the current $0.2040.

The token has erased billions of dollars in value as the market capitalization dropped from nearly $20 billion to the current $1.7 billion. This article explores what went wrong with the token and whether it will rebound.

The rise of Pi Network 

Pi Network is a cryptocurrency project that was launched by Dr. Nicolas Kokkalis and Dr. Chengdiao Fan to disrupt the crypto industry by solving some of the existing challenges.

For example, unlike Bitcoin, anyone can mind Pi Coin using their smartphone. Also, its transaction costs are much lower than other cryptocurrencies.

Launched in 2019, the project went viral globally, attracting over 60 million people who hoped to make a fortune mining the token. Its tools, including its browser and mining application, gained millions of users.

The project transitioned to the enclosed mainnet in December 2021, a period where the mainnet was ready but limited to external connectivity.

The enclosed mainnet period ended in February this year, allowing the token to be listed by a cryptocurrency exchange. Some of the companies that listed it are OKX, MEXC, Gate, and LBank.

However, pioneers had to pass a rigorous know your customer (KYC) process to move their tokens from the enclosed mainnet to the mainnet. The goal was to ensure that all tokens that move to the mainnet are associated with a real individual.

Also, as part of the transition from the enclosed mainnet to the real mainnet, the project needed to have at least 100 mainnet-ready applications, a move that was intended to give it utility.

READ MORE: Pi Network: From a global sensation to a crypto ghost chain

Why the Pi Coin price crashed 

Pi Network is now widely seen as one of the biggest flops in the crypto industry, with many of its users seeing it as a waste of time. 

Besides, many people who spent years mining the token have not benefited, with many of them being locked up in the KYC process and many seeing their investments flop.

There are several reasons why the Pi Network flopped. First, unlike many new cryptocurrencies, it did not receive substantial listings by exchanges, with Bybit’s CEO calling it a fraud. 

No other major exchange has listed the token since its launch in February this year, with the most important companies like Upbit, Binance, and Coinbase ignoring it. The lack of these listings means that millions of people don’t have access to the token and that its liquidity remains low.

Pi Network price crashed because it is widely seen as a ghost chain that has no major users. While some applications exist in the network, many people don’t find them useful.

Additionally, the token is highly dilutive, with millions of new tokens coming online each week. It is estimated that over 1.2 billion tokens will be unlocked in the next 12 months.

Pi Network’s price also plunged because of its centralization, where the obscure Pi Foundation controls billions of tokens. There is no voting process and the community has no say on anything.

Will the Pi Network price rebound?

To be fair to Pi, the ongoing crash also coincided with the weakness in other cryptocurrencies, including blue-chip names like Ethereum and Bitcoin.

The team is also making some major changes to boost the network and its token.. For example, they are now working on a testnet of its token generator, automated market maker (AMM), and decentralized exchange (DEX) tools. The hope is that its DEX platform will be as successful as other large players like Aave and Raydium.

The developers have also made two investments: CiDi Games and OpenMind, which are meant to grow its ecosystem in the long term. CiDi Games will introduce gaming features, while OpenMind will make it an AI platform.

They have also registered the coin for Europe’s MICA, a move that will see it listed by major exchanges in the region.

Therefore, while Pi Network price has plunged, a rebound cannot be ruled out in the coming year, especially when Bitcoin and other tokens like Ethereum rebound.

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BP share price has pulled back in the past few weeks as investors have watched energy prices dip. The stock was trading at 427p, down by 10% from its highest point in November. So, will the stock rebound after the company starts its divestments?

BP PLC made its first step in its divestment strategy

BP share price will be in the spotlight after the company announced a deal to sell a large stake in its Castrol business. In an announcement, the company said that it will sell its majority stake to Stonepeak Partners in a deal valuing it at $10.1 billion.

BP will net about $6 billion in cash from the transaction and remain as a minority investor. This sale is part of the company’s turnaround strategy that seeks to unload businesses worth over $20 billion in the coming years.

BP is hoping that these asset sales will help to simplify its business at a time when its stock has lagged behind other companies in the energy industry, like ExxonMobil, Shell, and Chevron.

It also expects that its asset sales will help it reduce its leverage and boost shareholder returns. The last point is notable as the company reduced its quarterly share buyback to between $750 million and $1 billion, down from $1.75 billion. 

BP has also made other things as part of its turnaround strategy. It scaled down its clean energy ambitions, and this month, the company announced a major management change. It poached Meg O’Neill from Woodside to become its CEO. 

She replaced Murray Aunchincloss, whose turnaround strategy received a lukewarm reception from investors. 

The most recent results showed that the company made a replacement cost profit of $2.2 billion in the third quarter and $3.8 billion in the first nine months of the year. It also made an operating cash flow of $7.8 billion, and is working to reduce its net debt to between $14 billion and $18 billion by the end of 2027. 

Is BP a good stock to buy?

BP’s main risk is that energy prices may remain under pressure in the foreseeable future. Brent and the West Texas Intermediate (WTI) have dropped by 25% from their highest point this year, and technicals point to more downside. 

BP, like other companies in the energy industry, does well when oil prices are rising and vice versa.

On the positive side, BP’s history of underperformance has left it severely undervalued compared to its rivals. As a result, the ongoing turnaround strategy will likely help it to boost its performance. 

READ MORE: BP is ‘certainly a takeover target’, market expert says

BP share price technical analysis

The daily chart shows that the BP stock price bottomed at 315p in April and then rebounded to a high of 470p. This rebound was a bet that the company’s turnaround strategy would work out well. 

Recently, however, the stock has pulled back after it formed a double-top pattern, one of the riskiest signs in technical analysis.

It has moved below the ascending trendline that connects the lowest swings since April last year. It also moved below the 100-day Exponential Moving Average (EMA) and 61.8 Fibonacci Retracement level.

Therefore, the most likely BP stock price forecast is bearish, with the next key support to watch being at the 50% Fibonacci Retracement level at 393p. On the other hand, a move above the resistance at 435p will invalidate the bearish outlook.

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The crypto market remained on edge on Christmas Eve as the recent Santa Claus rally faltered. Bitcoin was stuck below $90,000, while the market capitalization of all coins plunged to $2.94 trillion. This article provides a prediction of top tokens like Uniswap (UNI), Solana (SOL), and Shiba Inu (SHIB).

Uniswap price prediction 

The Uniswap token has remained on edge in the past few days despite some notable developments in the network. The most important one happened this week when the community members voted to the unification vote.

This vote will merge Uniswap and Unichain, meaning that its network fees will be incinerated afterwards. Most importantly, the network will burn 100 million tokens from the treasury. A token burn removes the amount of tokens in circulation, a notable thing as the supply of tokens in exchanges has dropped in the past few months.

The daily timeframe chart shows that the UNI price has dropped in the past few months moving from $12.25 in August to the current $5.60.

Uniswap token is hovering near the important support level at $4.686, a level it failed to move below since April this year.

The token has moved below the 50-day and 100-day Exponential Moving Averages (EMA) and is below the Supertrend indicator. 

It has also formed a head-and-shoulders pattern, a common bearish reversal sign. Therefore, the token will likely have a bearish breakout, a move that will be confirmed if it moves below the support at $4.686. A move below that level will point to more downside, potentially to the psychological level at $4.

Solana price technical analysis 

Solana, like other altcoins, has dropped in the past few months, moving from a high of $252 in September to the current $121. 

The token has dropped as it continued to lose market share against Ethereum, a chain that has continued to dominate in key industries like decentralized finance and real-world asset tokenization.

Solana has some bullish catalysts, including the rising ETF inflows and the upcoming Alpenglow upgrade, which will increase its performance significantly.

The token has remained below all moving averages, a sign that bears are in control. Most importantly, it has formed a bearish flag pattern, which is made up of a vertical line and an ascending channel.

Solana remains below the Supertrend and the Ichimoku cloud indicators. Therefore, the token will likely have a strong bearish breakdown in the coming weeks, potentially to the key support at $100.

Shiba Inu Coin price prediction 

Shiba Inu Coin price slumped in the past few months and is now hovering near its lowest level in years.

The token has plunged as demand for meme coins plunged. Indeed, a closer look shows that most of these tokens have plunged by over 60% from their peaks in 2025.

Shiba Inu has remained below all moving averages, while top oscillators like the Relative Strength Index and the MACD indicators have continued falling this month.

On the positive side, the token has formed a falling wedge whose two lines are about to converge. Therefore, the token will likely rebound and possibly retest the key resistance level at $0.000010.

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Ethereum price remained below the important support level at $3,000 as demand for the coin eased modestly. ETH dropped to a low of $2,935 on Wednesday, down sharply from the year-to-date high of $4,945. This article provides an ETH price prediction and what to expect in the near term. 

Ethereum price prediction

The daily chart shows that the ETH price has plunged in the past few months. It has crashed from the year-to-date high of $4,945 to the current $2,2935.

The token formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other on November 23, confirming the ongoing bearish breakdown.

ETH price has formed a bearish flag pattern, which is made up of a vertical line and an ascending channel. It has now moved below the lower side of the ascending channel.

Ethereum token has also dropped below the 50% Fibonacci Retracement level. It has moved below the Ichimoku cloud and the Supertrend indicators.

The token has moved below the Strong, Pivot, and Reverse level of the Murrey Math Lines. Therefore, the most likely scenario is where the token continues falling, potentially to the next key support level at $2,500. This is an important level as it was the ultimate support of the Murrey Math Lines and also the psychological level.

A move below that level will point to more downside, potentially to the psychological point at $2,000. On the other hand, a move above the key resistance level at $3,437, the bottom of the trading range. Such a move will push it to the year-to-date high of $4,960.

Ethereum price chart | Source: TradingView

ETH price has bullish catalysts as headwinds remain 

Ethereum price is facing some major headwinds that may push it lower in the near term. One of them is the ongoing crypto market crash that has affected Bitcoin and other altcoins. Indeed, for the first time in year, Bitcoin has crashed as other assets like gold, silver, and the S&P 500 jumped. 

Ethereum is also facing the challenge of the ongoing altcoin season weakness. Data compiled by CMC shows that the Altcoin Season Index has dropped sharply in the past few months.

Meanwhile, demand for Ethereum ETFs has waned in the past few weeks. These funds shed over $10.9 million in assets this week, bringing the cumulative monthly outflow to $510 million. The funds shed over $1.42 billion in assets last month. 

Additionally, the volatility may jump sharply in the coming days as investors prepare for a major options expiry. Over $3 billion worth of expiry will happen on Friday, and in most cases, this is usually accompanied by volatility. 

Still, despite all this, the Ethereum price faces some major tailwinds that may boost its performance in the long term. 

Its supply in exchanges has dropped to a multi-year low, while its market share in key industries like decentralized finance, stablecoins, and real-world asset (RWA) tokenization has grown. Its dominance has grown even as competition rose.

Also, while the Ethereum ETFs have had outflows recently, the reality is that they have added over $12 billion in the less than 2 years, which iss an encouraging number.

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Lucid Group stock price had a difficult performance this year as it continued falling due to major headwinds. It has dropped by 65% this year, with its market capitalization dropping from over $10.47 billion to the current $3.83 billion. So, is LCID a good company to buy today?

Lucid Group is doing well despite major headwinds

Lucid Group, a top player in the electric vehicle (EV) industry, is facing major headwinds as competition in the industry slows and demand for some of its brands, including Gravity remains weak.

Like other companies in the industry, Lucid Group is facing headwinds after Donald Trump ended the $7,500 EV tax credit as part of the Big Beautiful Bill. Also, the bill ended a provision that let other automakers pay Lucid and other EVs for carbon credits.

Meanwhile, the much-anticipated Gravity SUV is off to a slow start, with the company not disclosing its sales numbers to investors. Some analysts believe that the Gravity sales are now in their hundreds.

The most recent results showed that the company’s production rose by 116% to 3,891 in the third quarter, while its deliveries jumped by 47% to 4,078. 

As a result, its revenue rose by 68% to over $336 million as customers rushed to buy EVs ahead of the EV tax credit expiry. 

However, the profit drought continued in the third quarter, with its earnings-per-share missing estimates to the second consecutive quarter. Its earnings-per-share are $2.55, up from $2.2, with the company continuing to lose money for each vehicle sold.

On the positive side, analysts expect the company’s business to continue doing relatively well even with the ongoing woes in the electric vehicle industry. The average estimate among analysts is that the fourth-quarter revenue rose to $473 million, up sharply from the $234 million it made in the same period last year.

Analysts see Lucid’s growth continuing

Analysts also expect the company’s annual revenue to be $1.3 billion, followed by $2.43 billion next year. These assumptions mean that analysts expect little disruption from Donald Trump’s policies.

The challenge, however, is that Lucid’s losses will likely continue in the foreseeable future. Analysts expect the upcoming results to show that the earnings per share (EPS) will be a loss of $9.57 this year followed by $6.46 in the following year.

Lucid has also made some notable developments this year. It entered a major deal with Uber, which pledged to buy 20,000 Gravity SUV, which will be equipped with Nuro’s autonomous technology. It also invested $300 million in Lucid, helping it boost its balance sheet.

Lucid also received some good news from Saudi Arabia’s Public Investment Fund (PIC) that increased the delayed term loan facility from $750 million to $2 billion. Therefore, the company hopes that its current cash balances will provide it with enough liquidity until 2027.

Additionally, Lucid is hoping to launch a new vehicle that will be cheaper for other EVs, a move that will likely lead to more revenue and profitability.

Lucid stock price technical analysis 

The daily timeframe chart shows that the LCID stock price has been in a strong downward trend in the past few months, reaching a low of $11.

It has remained below all moving averages and the Supertrend indicator, meaning that bears are in control.

A closer look shows that the stock has formed a small double-bottom pattern at $11.5 and a neckline at $14.25. This is one of the most common bullish reversal signs in technical analysis.

Therefore, the stock will likely bounce back in the near term. Such a move will push it to the neckline at $14.25. A move above that level will point to more gains, potentially to the psychological level at $20. 

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AppLovin stock price has had a strong performance this year, continuing a bull run that started a few years ago when it was trading at $9.20. It has jumped to $720, giving it a market capitalization of over $243 billion, up sharply from less than $1 billion. So, will this advertising company continue its bull run?

AppLovin stock has surged as its growth has accelerated 

AppLovin is a top company in the technology and advertising industry, where it provides companies with tools for advertising, monetizing, analytics, and publishing. 

The company’s business has done well in the past few years as the advertising industry maintains its resilience and revenue growth continues.

Data shows that its annual revenue moved from $483 million in 2018 to $4.7 billion, and Wall Street analysts believe that it has more growth to run.

The average estimate among analysts is that its revenue will jump to $5.75 billion this year and $7.8 billion in 2026.

Most importantly, its earnings per share (EPS) is expected to move from $4.53 in 2024 to $9.35 this year and $14.5 in the coming year. Its real numbers will likely be much higher than estimates, as it has a long record of beating estimates.

The most recent results showed that AppLovin’s revenue jumped by 68% in the third quarter of the year to $1.41 billion, with its net income from continuing operations rising by 93% to $836 million.

Valuation concerns remain

AppLovin stock price surge has caught many investors by surprise, with the most notable ones being Muddy Waters, which published a short report. It accused the company of overstating its revenue and violating the terms of service by companies like Google and Meta Platforms. This report led to an SEC investigation on these practices.

The stock has thrived since that report came out in 2024. Still, this surge has led to concerns about the company’s valuation, which has extended.

Data compiled by Seeking Alpha shows that it has a valuation grade of D+. This valuation is based on the view that it has a forward PE ratio of 87, much higher than the sector median of 24. 

The valuation multiple is higher than the five-year average of 33. It is also much higher than other faster-growing companies like Nvidia.

Meanwhile, the forward EV-to-EBITDA multiple of 61, which is higher than the sector median of 20. That is a sign that the company is priced to perfection, meaning that it needs to continue beating analysts’ estimates by far.

Another way to look at the company’s valuation is to use the rule-of-40 approach, which looks at a company’s growth and its margins. In this case, the company’s forward revenue growth is 33%, while its net income margin is 44%, giving it a rule-of-40 multiple of 77%.

Therefore, while the P/E multiple is higher than that of other companies, the rule-of-40 multiple means that it is sending mixed signals.

AppLovin share price technical analysis 

The daily timeframe chart shows that the APP stock price has been in a strong uptrend in the past few months and is now trading at $725, a few points below the all-time high of $742.

It has remained above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control.

The stock has formed a double-top pattern at $725 and a neckline at $490, meaning it may retreat in the coming weeks. 

However, a closer look shows that it may be forming an inverse head-and-shoulders pattern, which is a common bullish reversal sign.

Therefore, the stock may keep rising if it moves above the neckline at $725. A move above that level will point to more gains, potentially to $800.

READ MORE: Cramer recommends trimming exposure to AppLovin stock ahead of S&P 500 inclusion

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