Applovin gains ahead of non-gaming self-serve launch

Investing.com -- Applovin shares rose ahead of the October 1 launch of its long-awaited self-serve tool for non-gaming advertisers, a rollout that analysts see as a key catalyst for the company’s next growth phase.

The stock was up 2.4% in premarket trading Monday as of 08:21 ET, as investors positioned for what Morgan Stanley described as the “most important proof point yet on the scalability” of Applovin’s non-gaming advertising business.

The launch of AXON Ads Manager will allow e-commerce and other non-gaming clients to join the platform without manual onboarding. Until now, Applovin’s pilot had been limited to about 600–700 advertisers, averaging $1.5 million to $2 million in annual gross spend each.

The move to self-serve is expected to multiply the customer base over time, with international advertisers included for the first time.

Morgan Stanley lifted its price target on the stock to $750 from $480 and reiterated an Overweight rating, citing both the scale of the opportunity and strong execution so far.

The target increase reflects a higher valuation multiple of 35x EV/EBITDA, up from 27x previously, which the analysts said is in line with leading peers on a growth-adjusted basis.

Analysts raised 2026 EBITDA estimates by 22%, modeling $1.75 billion of net ad revenue from non-gaming that year.

“Every $100 million of non-gaming ad spend would drive $90 million (or ~1.5%) upside to ’26 EBITDA,” analysts led by Matthew Cost noted. They also said the potential for revisions “skews strongly to the upside,” with stronger-than-expected customer growth seen as far more likely than the opposite.

The team pointed to early traction across ecommerce, fintech, healthcare and insurance, arguing that success in multiple verticals could expand the addressable market further. It also highlighted that 90% incremental margins from Applovin’s ad business should ensure a direct translation of revenue growth into earnings.

“We are bullish on the opportunity to meaningfully expand the customer base while maintaining performance,” the analysts wrote, adding that the probability of stronger-than-expected customer growth “far exceeds the inverse.”

Morgan Stanley values Applovin at a premium to peers, saying the multiple is justified by its multi-vertical potential, pace of innovation and cash flow profile.

With the product moving from pilot to broader rollout, investor focus will be on whether Applovin can sustain high returns on ad spend as its advertiser base scales and how quickly new clients are onboarded.