AppLovin Surges 6.5% Following Citi's Top Pick Endorsement

AppLovin's stock rose 6.5% after Citigroup reaffirmed its top pick status and raised its price target to $600, implying 70% upside. The ad tech company reported 71% growth in its core advertising business to $1.15 billion in Q1, with adjusted EBITDA jumping 92% to $943.3 million. The sale of its mobile app game business in May allowed it to fully focus on its ad tech platform, making it a potential buy.

AppLovin's stock rose 6.5% on July 2, 2025, following Citigroup's reaffirmation of its top pick status and raising its price target to $600, implying a 70% upside. The ad tech company reported a 71% growth in its core advertising business to $1.15 billion in Q1, with adjusted EBITDA jumping 92% to $943.3 million. The sale of its mobile app game business in May allowed it to fully focus on its ad tech platform, making it a potential buy.

Citigroup expects AppLovin to report robust Q2 2025 results, with revenue and adjusted EBITDA landing at the high end of the company's guidance range. The investment bank highlighted several key areas for investors to focus on, including AppLovin's eCommerce advertising initiative, the launch of self-serve tools in Q4 2025, and the impact of app store fee changes on mobile ad spending.

AppLovin's strong performance metrics and competitive advantages have drawn attention from other analysts. Piper Sandler and Morgan Stanley have also raised their price targets to $470 and $460, respectively. Scotiabank initiated coverage on AppLovin with a Sector Outperform rating and a $430 price target, citing the company's strong performance metrics and competitive advantages.

Despite the positive outlook, AppLovin faces challenges such as rising competition in demand-side platforms and potential regulatory shifts. However, the company's focus on reinvestment in research and development and marketing, as well as its high gross margin level, positions it well to maintain its competitive edge.

References:
[1] https://www.investing.com/news/analyst-ratings/citi-reiterates-buy-rating-on-applovin-stock-ahead-of-q2-earnings-93CH-4133705
[2] https://www.ainvest.com/news/applovin-surges-citi-top-pick-endorsement-71-core-ad-business-growth-2507/