AppLovin Corporation (APP) shares are drawing attention Wednesday after Wedbush published a positive take on the software company following an advisor call.
What's Driving the Optimism? Wedbush, which rates AppLovin as Outperform with an $800 price target, held an advisor call Tuesday that painted an encouraging picture of the company's trajectory.
The headline item? Mobile gaming eCPMs are accelerating hard heading into the holiday season. Wedbush credits this surge to AppLovin's e-commerce push and higher game volume flowing through its platform.
But the real story is what analyst Alicia Reese calls a "significant data moat." AppLovin's MAX product lets users run real-time bidding for advertising space on their apps. That generates tons of valuable data, which AppLovin then feeds into its AXON algorithm—the engine that matches ads to apps with scary precision.
This creates what Reese describes as a self-reinforcing cycle of continuous model optimization that competitors can't easily replicate. The more data AXON processes, the better it gets, which attracts more users, which generates more data. Rinse and repeat.
The E-Commerce Angle Wedbush is particularly impressed by AppLovin's expansion into e-commerce advertising. Some observers worry that core gaming ad spend might be approaching a saturation ceiling, but Reese argues the e-commerce pivot gives AppLovin breathing room beyond that potential cap.
The numbers back up the enthusiasm. Last quarter, AppLovin crushed both Wedbush's projections and broader market expectations. The company delivered $1.405 billion in revenue versus Wedbush's $1.35 billion estimate and consensus of $1.34 billion. Earnings per share came in at $2.45, topping the $2.41 consensus.
Looking Forward Wedbush sees more catalysts ahead, including the public rollout of AppLovin's Axon Ads platform. The new offering will lean on AI agents for automation and generative AI for creating ad content. Longer-term growth drivers include increased advertiser density, international expansion, and moving into open web inventory beyond mobile apps.
Price Action: AppLovin shares were down 1.62% at $665.76 at the time of publication.