Why Investors Were So Sweet on AppLovin Stock This Week

Core Viewpoint - AppLovin's stock has seen a significant increase in value following a bullish recommendation upgrade from UBS analyst John Hodulik, indicating strong investor interest and positive sentiment towards the company's growth potential [1][2]. Group 1: Analyst Upgrade - UBS analyst John Hodulik upgraded AppLovin's rating to a buy with a price target of $145, a notable increase from his previous neutral rating with a $100 price target [2]. - Hodulik highlighted the company's encouraging medium-term revenue growth and modest valuations, suggesting effective management performance [2]. Group 2: Revenue Growth Expectations - AppLovin's improved return on ad-spend (ROAS) compared to competing channels is expected to support a 20-30% growth in software revenue from gaming alone [2]. - Following a strong second quarter performance that exceeded analyst expectations, multiple analysts have raised their price targets for AppLovin, anticipating robust growth [3]. - Projections indicate that AppLovin's net income for 2024 is expected to increase more than threefold year-over-year to $3.44 billion, driven by a 35% rise in revenue [3].