AppLovin (APP) Just Got a $430 Price Target—Here’s Why Wall Street Is Buzzing

AppLovin Corporation (NASDAQ:APP) is one of the AI Stocks Making Waves on Wall Street. On July 8, Scotiabank analyst Nathaniel Schindler initiated coverage on the stock with a “Sector Outperform” rating and a $430 price target. With AppLovin’s artificial intelligence tools expanding beyond gaming, the firm believes the mobile marketing specialist is pulling ahead in performance advertising.

It said that its proprietary AXON engine, which has been trained on more than $10 billion of historical ad spend, augments campaigns in real time and formulates a “vast moat to cross for new entrants.”

AppLovin has been allowing smaller brands into its network, potentially tapping a “second core revenue vertical” worth more than $1 billion.

The bank’s positive assessment reflects renewed confidence in terms of growth prospects for the company. According to them, AppLovin has “blown through the Rule of 40,” which is a key metric for software investors balancing revenue growth with profit margins. A company’s combined growth rate and profit margin should exceed 40% to pass the Rule of 40.

Even though shares look expensive when compared to sales, the firm said they are trading at an attractive multiple of future earnings. Three catalysts are also working in favor of AppLovin; namely, broader adoption of AXON across advertisers seeking conversion‑based campaigns, booming budget shifts from social‑media platforms toward AppLovin’s network, and sustained insulation from data‑privacy changes due to the company’s on‑device footprint.

Needless to say, there are also some risks. These include rising competition in demand‑side platforms as well as potential regulatory shifts.

AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology.

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Disclosure: None.