AppLovin Stock (APP) Gains New Bull: Coverage Initiated at $700

AppLovin Corporation (NASDAQ: APP) is experiencing a fresh wave of optimism as RBC Capital initiated coverage with an Outperform rating and a $700 price target. This bullish stance arrives amidst a backdrop of significant developments for the advertising and marketing technology firm, influencing investor sentiment and market performance.

The stock is currently trading at $590.11, reflecting a $20.01 (0.04%) increase from the previous close. Although in the pre-market trading session, the stock has slid 1.97%, and now sits at $578.50. RBC Capital’s analysis highlights the increasing interconnectedness of advertising and marketing technology, positioning AppLovin as a primary beneficiary. The firm anticipates that the growing emphasis on personalized marketing and enhanced attribution will fuel AppLovin's growth. The analyst believes AppLovin is well positioned to capitalize on the expanded reach of its platform, unlocking secular growth opportunities within personalized marketing and retail media trends, especially within the e-commerce sector. Furthermore, the company’s fixed cost model is expected to drive outsized growth throughout 2026.

This positive outlook comes despite recent challenges. In early October 2025, AppLovin faced scrutiny as the U.S. Securities and Exchange Commission (SEC) launched an investigation into the company’s data-collection practices. The probe, triggered by a whistleblower complaint and short-seller reports, alleges potential violations of platform partners' service agreements to deliver more targeted advertising. News of the SEC investigation initially caused a 14% drop in AppLovin's stock price, underscoring the market's sensitivity to regulatory concerns.

However, AppLovin also celebrated a major milestone in September 2025 with its inclusion in the S&P 500 index. This event typically signals financial stability and market credibility, leading to increased demand from passive investment funds and ETFs. The announcement spurred a 7% surge in AppLovin's shares in after-hours trading, demonstrating the positive impact of index inclusion on investor confidence.

Adding to the bullish momentum, several analysts have recently raised their price targets for AppLovin. Morgan Stanley lifted its price target to $750, reiterating an overweight rating, citing the upcoming launch of Axon Ads Manager as a catalyst for expanding AppLovin’s non-gaming business.

Jefferies increased its price target to $615, following a meeting with AppLovin's management, expressing optimism about the company's top-line growth driven by higher spending from existing advertisers, international audience expansion, and new client onboarding. Benchmark added AppLovin to its “Top Ideas List,” citing strong growth catalysts such as AI-driven ad targeting in the gaming sector, e-commerce expansion, and new self-service tools.

AppLovin's robust financial performance has further supported positive investor sentiment. In Q2 2025, the company reported earnings that exceeded analysts' estimates, with net income more than doubling to $819.5 million, or $2.39 per share, from $310 million, or 89 cents per share, a year earlier.

Revenue increased 77% to $1.26 billion. Moreover, the company's share buyback program, amended in March 2025, allows for immediate repurchase of $500 million and future quarterly repurchases of $500 million plus the amount of free cash flow generated in the preceding fiscal quarter, up to the existing repurchase maximum of $1.77 billion.

Strategically, AppLovin has been proactive in pursuing growth opportunities. The company submitted a preliminary bid to acquire TikTok’s operations outside of China in April 2025, aiming to expand its reach in the social media and advertising sectors. The launch of Axon Ads Manager on October 1, 2025, a self-serve tool aimed at non-gaming advertisers, is expected to unlock new ad budgets and drive growth.