AppLovin Corp (NASDAQ: APP) tumbled rather significantly late on Monday following reports the SEC is probing its advertising practices – particularly around its AI-enabled AXON platform.The scrutiny follows short seller allegations of unauthorised data collection and deceptive targeting methods – and casts a shadow over APP’s near-term growth narrative while raising questions about compliance risks.For long-term investors, though, it may just be an opportunity to invest in AppLovin stock at deep discount.Should you buy the SEC-driven dip in AppLovin stockLoading up on APP shares as they slip on the SEC news could prove rewarding for investors over time given the company’s track record of rebounding from controversy.Following short seller reports in February that triggered double-digit declines, AppLovin stock not only recovered – but surged to new highs as investors refocused on fundamentals.The regulatory probe may rattle sentiment, but it doesn’t alter the firm’s core growth drivers. With AXON 2.0 gaining traction and mobile gaming ad spend expanding – AppLovin remains strongly positioned.  For investors with a long enough horizon, this pullback resembles past dislocations that ultimately proved to be attractive entry points. Simply put, history suggests APP doesn’t just survive scrutiny – it accelerates through it.  Should valuation deter investors from APP shares?According to Needham analyst Bernie McTernan, the ad-tech firm is expensive to own at current levels – but “rightfully so” since it’s a major beneficiary of artificial intelligence.“Games should be able to get better [due to AI]. That’s going to drive more consumer wallet share, more consumer mind share,” he told CNBC in an interview today.McTernan attributed AppLovin’s seemingly stretched valuation to its potential to become the new Meta or Google for the web era – referencing its expansion into eCommerce and the open web – where consensus expects $1.6 billion in revenue next year.He expects the company’s recent launch of self-service platform on referral basis to unlock similar scale, and believes APP will follow the same trajectory as TikTok that “went from a billion to two billion to five billion to nine billion.”All in all, the Needham analyst recommends that investors look beyond valuation in APP stock as it sits right at the heart of a “secular winning part of the market.”How the failed Unity deal actually helped AppLovinIn 2022, AppLovin attempted to acquire Unity, which at the time chose to merge with IronSource instead. In hindsight, though, the failed buyout actually looks like a blessing in disguise.Unity’s deal with IronSource led to a prolonged integration phase. Meanwhile, APP doubled down on AXON 2.0 – capturing a critical product cycle that “U” missed.  “Unity has had a tremendous year,” McTernan acknowledged, “but AppLovin has exploded,” now commanding roughly $15 billion in gross ad spend – nearly half the mobile gaming market.The failed merger allowed AppLovin to stay nimble, innovate faster, and expand its TAM into e-commerce.What once looked like missed opportunity now appears to be a strategic win, reinforcing AppLovin stock’s edge in a rapidly evolving ad tech landscape.The post AppLovin stock: why SEC probe shouldn't concern long-term investors appeared first on InvezzAppLovin Corp (NASDAQ: APP) tumbled rather significantly late on Monday following reports the SEC is probing its advertising practices – particularly around its AI-enabled AXON platform.The scrutiny follows short seller allegations of unauthorised data collection and deceptive targeting methods – and casts a shadow over APP’s near-term growth narrative while raising questions about compliance risks.For long-term investors, though, it may just be an opportunity to invest in AppLovin stock at deep discount.Should you buy the SEC-driven dip in AppLovin stockLoading up on APP shares as they slip on the SEC news could prove rewarding for investors over time given the company’s track record of rebounding from controversy.Following short seller reports in February that triggered double-digit declines, AppLovin stock not only recovered – but surged to new highs as investors refocused on fundamentals.The regulatory probe may rattle sentiment, but it doesn’t alter the firm’s core growth drivers. With AXON 2.0 gaining traction and mobile gaming ad spend expanding – AppLovin remains strongly positioned.  For investors with a long enough horizon, this pullback resembles past dislocations that ultimately proved to be attractive entry points. Simply put, history suggests APP doesn’t just survive scrutiny – it accelerates through it.  Should valuation deter investors from APP shares?According to Needham analyst Bernie McTernan, the ad-tech firm is expensive to own at current levels – but “rightfully so” since it’s a major beneficiary of artificial intelligence.“Games should be able to get better [due to AI]. That’s going to drive more consumer wallet share, more consumer mind share,” he told CNBC in an interview today.McTernan attributed AppLovin’s seemingly stretched valuation to its potential to become the new Meta or Google for the web era – referencing its expansion into eCommerce and the open web – where consensus expects $1.6 billion in revenue next year.He expects the company’s recent launch of self-service platform on referral basis to unlock similar scale, and believes APP will follow the same trajectory as TikTok that “went from a billion to two billion to five billion to nine billion.”All in all, the Needham analyst recommends that investors look beyond valuation in APP stock as it sits right at the heart of a “secular winning part of the market.”How the failed Unity deal actually helped AppLovinIn 2022, AppLovin attempted to acquire Unity, which at the time chose to merge with IronSource instead. In hindsight, though, the failed buyout actually looks like a blessing in disguise.Unity’s deal with IronSource led to a prolonged integration phase. Meanwhile, APP doubled down on AXON 2.0 – capturing a critical product cycle that “U” missed.  “Unity has had a tremendous year,” McTernan acknowledged, “but AppLovin has exploded,” now commanding roughly $15 billion in gross ad spend – nearly half the mobile gaming market.The failed merger allowed AppLovin to stay nimble, innovate faster, and expand its TAM into e-commerce.What once looked like missed opportunity now appears to be a strategic win, reinforcing AppLovin stock’s edge in a rapidly evolving ad tech landscape.The post AppLovin stock: why SEC probe shouldn't concern long-term investors appeared first on Invezz