AppLovin Stock Keeps on Climbing. Why It Still Has Room to Rise.

AppLovin scored two price-target boosts ahead of the soft launch of its AI ads manager tool. (Dreamstime)

Key Points

• AppLovin’s stock gained on Friday, with a 103% rise this year and over 400% in the last 12 months.
• Piper Sandler raised its price target to $740, citing the potential of the upcoming Axon Ads Manager platform, powered by Axon 2.0 AI.
• UBS maintained a Buy rating and boosted its price target to $810 from $540, expecting strong execution on demand and supply expansion.

AppLovin stock has been on a tear over the last year, and the mobile technology company isn’t slowing down any time soon, analysts say.

The company, which provides monetization tools to mobile app developers, scored two price-target boosts from Wall Street on Thursday ahead of the soft launch of its self-serve Axon Ads Manager platform next month.

AppLovin shares were up 2.8% to $658.08 on Friday. The stock has climbed 103% this year and more than 400% over the last 12 months, helping to earn it a place in the S&P 500 .

Piper Sandler reiterated an Overweight rating and raised its price target on the stock to $740, touting the potential of Axon Ads Manager, which is powered by the company’s new Axon 2.0 artificial-intelligence engine.

“Management is signaling confidence on the product, which we think is warranted,” Piper Sandler’s James Callahan wrote. “While we expect the rollout to be challenging and non-linear, excitement seems appropriate.”

Axon adds to other AI-forward products like Dynamic Product Ads, which use AI to scrape sites to generate imagery for ads. Other than Meta Platforms , most social media names are still trying to build out this kind of tool, Callahan said. The result? Better outcomes and more spending from major advertisers.

Analysts at UBS also see a positive response to AppLovin’s offerings among both e-commerce and gaming advertisers. The firm is confident about AppLovin’s demand even though some industry experts see growth moderating either now or in the coming quarters.

“We’re reiterating APP as our top pick,” wrote Chris Kuntarich of UBS. “Over the next 12-months, we expect APP to execute on a combination of demand and supply expansion initiatives.”

The firm maintained a Buy rating and boosted its price target on the stock to $810 from $540.

Write to Nate Wolf at nate.wolf@barrons.com