Despite recent volatility in its stock price, mobile technology firm AppLovin (APP) has received a vote of confidence from Morgan Stanley. The investment bank upgraded its rating on the company, signaling belief in its underlying strength and future prospects even after market volatility.
Analyst Upgrades Rating, Sees Upside
Morgan Stanley has elevated AppLovin to an “overweight” rating. This positive reassessment comes even though the stock experienced a notable decline recently, following a significant 712% surge in 2024. Analyst Matthew Cost adjusted the price target to $350; while lower than a previous target, this new figure still suggests a potential 27% upside from current levels.
Cost highlighted AppLovin’s performance within the ad tech industry, describing the company as demonstrating significant resilience. Key strengths noted include its substantial focus on direct response advertising budgets and its consistent ability to innovate within the mobile advertising landscape.
Strong Position in Gaming and Diversification
AppLovin has historically been a major player in in-app mobile advertising, particularly within gaming. According to the analyst, the company continues to solidify its position in this core market. Furthermore, current expectations for growth within the gaming sector are considered more realistic, potentially positioning the stock favorably for sustainable progress.
The firm’s growth strategy appears two-pronged: continuing to capture market share within gaming advertising while simultaneously generating new revenue streams by expanding its services into non-gaming categories.
Positive Medium-Term Growth Expectations
Looking ahead, Morgan Stanley projects that AppLovin’s advertising revenue could achieve a robust 30% compound annual growth rate (CAGR) between 2024 and 2027. This growth is expected to be fueled by both its established gaming segment and its expansion into other verticals.
The bank’s positive outlook is based on AppLovin’s solid operational structure, ongoing innovation, and proven adaptability. Consequently, Morgan Stanley views AppLovin as a compelling opportunity for investors seeking exposure to the high-performance ad tech sector combined with a degree of operational stability.
Maxwell Reed is the first editor of Cryptovista360. He loves technology and finance, which led him to crypto. With a background in computer science and journalism, he simplifies digital currency complexities with storytelling and humor. Maxwell began following crypto early, staying updated with blockchain trends. He enjoys coffee, exploring tech, and discussing finance’s future. His motto: “Stay curious and keep learning.” Enjoy the journey with us!