BofA maintains AppLovin buy rating, $580 price target

On Monday, BofA Securities maintained their Buy rating on AppLovin Corp (NASDAQ:APP) stock, with a steady price target of $580.00. According to InvestingPro data, AppLovin commands a market capitalization of $1.89 trillion and has demonstrated robust revenue growth of nearly 14% over the last twelve months. BofA Securities analyst Omar Dessouky provided insights following recent claims by Muddy Waters regarding the potential risks faced by AppLovin. Muddy Waters’ report, dated March 27, 2025, suggested that AppLovin was at risk of being removed from major platforms such as iOS, Android, or Meta (NASDAQ:META) and that its Audience+ platform could easily lose market share to competitors. The report also questioned the added value of Audience+, arguing that it offers low incrementality for advertisers. Notably, InvestingPro data shows a strong analyst consensus with an average rating of 1.6 (where 1 is Strong Buy), suggesting broad market confidence despite these concerns.

Contrasting these claims, AppLovin’s CEO addressed the concerns in a blog post on the same day, asserting that Audience+ operates similarly to other major web data collectors like Meta and Google (NASDAQ:GOOGL), and provides significant value to advertisers beyond other channels. After a thorough review of the arguments from both sides and consulting with an independent expert, Dessouky concluded that the assertions made by Muddy Waters reflect common practices in the online advertising industry and do not warrant any change in the investment firm’s outlook on AppLovin.

Dessouky’s analysis supports the continued confidence in AppLovin, highlighting the company as BofA’s top pick. He emphasizes the attractiveness of the stock’s valuation, noting that the current 17x enterprise value to calendar year 2026 EBITDA (EV/CY26 EBITDA) multiple is considered inexpensive, especially in light of the projected 50% two-year EBITDA compound annual growth rate (CAGR) based on BofA’s estimates. The company’s current P/E ratio of 19.01 and EBITDA of $129.5 billion further support this valuation perspective, as revealed by InvestingPro analysis.

AppLovin’s stock rating and price target affirmation by BofA Securities come amidst a backdrop of scrutiny within the online advertising sector, where companies often face challenges related to data collection practices and platform dependencies. Despite these industry-wide concerns, BofA’s stance indicates a belief in AppLovin’s resilience and potential for continued growth. With analyst price targets ranging from $164 to $237 and the next earnings report due on April 29, 2025, investors seeking deeper insights can access comprehensive valuation metrics and 12+ additional ProTips through InvestingPro’s detailed research reports.

In other recent news, Google has announced a significant update to its YouTube Shorts platform. Starting in March 2025, the company will align its view-counting metrics with those of TikTok and Instagram, eliminating the previous requirement for a video to be watched for a certain number of seconds to count as a view. This change aims to provide creators with more comprehensive performance insights. Additionally, Google has introduced an AI-powered search feature in Gmail to help users find emails more quickly and efficiently, prioritizing the most relevant results based on various factors.

In collaboration news, Lockheed Martin (NYSE:LMT) and Google Public Sector have partnered to integrate Google’s advanced generative AI into Lockheed Martin’s AI Factory ecosystem. This integration will enhance Lockheed Martin’s capabilities in areas such as national security and aerospace. Furthermore, Google Wallet has introduced a new feature allowing children in select countries to make digital payments under parental supervision, emphasizing security and parental control.

Meanwhile, Google’s Senior Director of Competition, Oliver Bethell, has criticized the European Union’s competition rules, arguing that they negatively impact consumers and businesses by hindering innovation and weakening security. Despite these criticisms, Google has stated its intention to continue engaging with the European Commission and complying with its regulations.

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