AppLovin (APP) Rated Buy at Deutsche Bank on Strength of AI-Driven Advertising Platform

Core Insights - AppLovin Corporation (NASDAQ:APP) is recognized as a leading player in the AI stock market, with Deutsche Bank initiating coverage with a "Buy" rating and a price target of $705, highlighting the company's strong performance in mobile advertising technology [1][2]. Company Overview - AppLovin holds a dominant position in the mobile games user acquisition advertising sector, commanding an 80% market share on the supply side and over 55% on the demand side [2]. - The company has a daily active user (DAU) reach exceeding 1 billion, making it a formidable competitor in the advertising space [2]. Technology and Growth Potential - AppLovin's advertising technology is described as "best-in-class," with performance improving as the company's scale increases, creating a self-reinforcing growth cycle [3]. - The Axon model developed by AppLovin is versatile and effective across various platforms, and the company is expanding into eCommerce advertising, which is significantly larger than the mobile game in-app advertising market [3]. - Projections indicate that AppLovin could achieve a 25% compound annual growth rate (CAGR) from 2024 to 2027, even with a modest penetration of eCommerce ad spending [3]. Market Expansion - The company is exploring opportunities in larger categories such as financial services, media & entertainment, healthcare, and other transactional services on the web, which could further enhance its market position [3].