A Wall Street analyst sees similarities between AppLovin's market position in mobile games and Google's strength in programmatic advertising. The analyst started coverage of AppLovin stock with the equivalent of a buy rating.
Wells Fargo analyst Alec Brondolo late Monday initiated coverage of AppLovin stock with an overweight rating and price target of 200.
In a client note, he likened AppLovin's strength in mobile-game user acquisition to that of Alphabet's Google in programmatic ads after it purchased DoubleClick in 2008.
"As a result, we expect AppLovin to continue capturing share and beating revenue estimates in the $34 billion sector," he said.
The mobile-game user acquisition market is large enough for AppLovin to see compound annual revenue growth of 20% to 30% through 2027, Brondolo said.
AppLovin Stock Hits Record High
On the stock market today, AppLovin stock rose 3.6% to close at 172.24. Earlier in the session, it hit an all-time high of 172.55.
AppLovin stock has been on an absolute tear since Aug. 22 when it hit a buy point of 91.91 out of a six-week consolidation pattern, according to IBD MarketSurge charts.
Further, AppLovin stock is on the IBD Tech Leaders list.
The Palo Alto, Calif.-based company plans to report its third-quarter results on Nov. 6.
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