Analysts are improving their outlook on AppLovin. What does its new advertising tool have to do with it?

Analysts at Phillip Securities and Morgan Stanley recommended buying shares of US marketing software developer AppLovin. Wall Street sees prospects for AppLovin's market expansion thanks to the upcoming launch of a new advertising application that will allow clients from e-commerce and other non-gaming segments to join the platform for advertising in games. The company's stock was up 6% in trading on Sept. 29.

Morgan Stanley analysts led by Matthew Costa raised their target price on shares of AppLovin, a developer that delivers marketing offers to mobile games, from $480 to $750 on Sept. 29, Seeking Alpha reports. The new target is 5% above Monday's closing price. The investment bank also maintained an Overweight rating on the stock, which equates to a buy advice.

Investment bank Phillip Securities initiated coverage of AppLovin on the same day, setting a target price of $725 (1.8% above the last close) and assigning an Accumulate rating. This amounts to advice to accumulate the stock in the portfolio (buy) without haste.

In Monday trading, AppLovin securities rose 6.3% to $712.4. They are up 119% since the beginning of the year and 230% from their April low.

AppLovin is preparing to launch Axon Ads Manager, a self-service tool for non-gaming advertisers, on October 1. It will allow clients from e-commerce and other non-gaming segments to join the platform without going through manual registration, Seeking Alpha explains. The rollout will begin in a closed format - by invitation only. And in the first half of 2026, the platform will become available to all advertisers. International clients will also be connected for the first time.

Morgan Stanley believes the app launch will be a key catalyst for AppLovin's mobile advertising business. "Over the past year, while AppLovin has been scaling its non-gaming advertising pilot, it has relied heavily on manually onboarding new clients, limiting its base to just 600-700 advertisers (based on the latest available data)," Morgan Stanley said in a note. - From our perspective, the launch of a self-service tool creates an opportunity to grow the client base multiple times over."

According to Morgan Stanley analysts, the successful launch of the self-service platform will be the most important validation of the scalability of AppLovin's advertising product beyond the gaming segment. The investment bank also raised its fourth-quarter 2025 earnings per share forecast to $2.67 from $2.37. Phillip Securities, cited by Investing.com, expects AppLovin's revenue growth to be 55% for the full year 2025. The investment bank also cites the upcoming launch of Axon Ads Manager as well as the integration of generative AI into the company's apps as key growth areas.

Last week, Piper Sandler raised its target price target on AppLovin shares from $500 to $740, maintaining an "Above Market" rating, while UBS raised its target price from $540 to $810, reiterating a "buy" rating. In doing so, UBS again called AppLovin a "key bet" in its portfolio and allowed the stock to rise to $1,000. Jefferies raised its target on the stock from $615 to $760 and reiterated a buy recommendation on the stock.

In total, 24 of the 30 analysts tracking the securities recommend buying, four recommend holding, and two recommend selling, according to MarketWatch. The Wall Street consensus price target is $601.3, which is 15.5% below the stock's current price.

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