Applovin Stock (NASDAQ:APP) In Correction Territory: Analyst Raises Price Target

Applovin's stock price (NASDAQ:APP) is 1.86% lower ahead of the open, despite a positive assessment from Wells Fargo.

Wells Fargo analyst Alec Brondolo raised the firm's price target on AppLovin to $735 from $721, reiterating an “Overweight” rating. This bullish stance stems from expectations of robust mobile game performance, leading to a 3% increase in Q4 revenue projections.

However, the analyst also pointed to mixed trends in web advertising, with positive signs in new customer acquisition offset by relatively flat year-over-year spending from existing advertisers. This mixed outlook, coupled with the anticipation of conservative guidance from AppLovin for Q1, appears to have tempered market enthusiasm.

Analyst ratings and price target adjustments have been a recurring theme for AppLovin.

Jefferies, for example, increased its price target to $615 from $560 in September 2025, citing growth drivers such

as increased spending from existing advertisers, international audience expansion, and new client acquisitions. Furthermore, Morgan Stanley raised its price target to $750, emphasizing the potential of the upcoming Axon Ads Manager launch to unlock ad budgets outside the gaming sector.

Regulatory and Strategic Headwinds

However, AppLovin has also faced challenges that have impacted its stock performance. The SEC investigation into the company's data collection practices, specifically allegations of unauthorized user tracking, led to a 14% drop in the stock price in October 2025. While AppLovin has denied these claims, the regulatory scrutiny introduces uncertainty and impacts investor sentiment. This development underscores the risks associated with data privacy and compliance in the advertising technology sector.

Strategic business decisions have also played a role in shaping AppLovin's stock performance. The sale of its mobile gaming business to Tripledot Studios for $400 million in cash, along with acquiring a 20% ownership stake in Tripledot, reflects a strategic shift towards focusing on its AI-powered ad search engine, AXON.

With Applovin's stock price having added 92% over the past 12 months, and in the midst of a ~13% pullback from recent highs, this could be looked at as a period of consolidation whilst markets await the next move. Today's note from Wells Fargo suggests that move is more likely to be to the upside, although the next earnings in a little over a month's time could play a pivotal role in what happens next.