AppLovin is the IBD Stock Of The Day as the app marketing platform earns positive reviews for its nascent e-commerce advertising service.
In a client note Thursday, UBS analyst Chris Kuntarich provided favorable data points related to AppLovin's e-commerce ads offering.
He spoke with an executive at a beauty and cosmetics brand with $70 million in advertising spending in 2024. The executive "was bullish on spending with AppLovin," based on encouraging results, Kuntarich said.
The brand executive said AppLovin's e-commerce beta program likely includes "a few hundred" advertisers, he said. Kuntarich has a buy rating on AppLovin stock.
AppLovin's business to date has largely been driven by ads for mobile gamers. It is now looking to diversify.
AppLovin's software platform enables app developers to market, monetize and analyze their apps. The Palo Alto, Calif.-based company also makes mobile games such as "Wordscapes," "Matchington Mansion" and "Game of War."
On the stock market today, AppLovin stock jumped 7% to close at 340.99.
AppLovin Stock Is On Three IBD Lists
AppLovin stock is consolidating after finding support at its 21-day exponential moving average line, according to IBD analysis.
Last week, AppLovin stock fell after it was passed over for inclusion in the S&P 500 during the index's quarterly rebalancing.
Oppenheimer analyst Martin Yang called that drop a "very good buying opportunity for one of the most exciting growth companies at a reasonable valuation."
Earlier this week, Jefferies analyst James Heaney reiterated his buy rating on AppLovin stock with a price target of 400. He called APP stock a "top pick for 2025."
Heaney cited AppLovin's growing share in e-commerce ad spending for his upbeat report.
AppLovin stock is on three IBD lists: Big Cap 20, SwingTrader and Tech Leaders. IBD added AppLovin to SwingTrader on Friday.
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