New York, May 29, 2026, 16:03 EDT
- AppLovin shares last changed hands up 2.0% at $612.07 late Friday, moving ahead of the broader U.S. market.
- Morgan Stanley is pointing to ad-conversion gains, putting less weight on mobile-gaming growth in its latest call.
- Next up is to see if AppLovin’s June self-serve launch grabs more non-gaming ad buyers.
AppLovin shares pushed higher Friday, last up 2.0% to $612.07. Buyers kept coming in as bulls bet the ad-tech firm can get more out of its Axon engine. The stock hit $616.57 in the session, putting AppLovin’s market cap near $207 billion.
AppLovin’s rally has shifted from a post-earnings pop to a fresh debate on its conversion rate — the chunk of ads that actually get users to download, buy or take action. Investors are watching to see if AppLovin can keep pushing the conversion number higher as the main mobile-gaming thread now grows and ages.
Morgan Stanley left its Overweight rating and $720 target on AppLovin unchanged. The firm said about 99% of AppLovin’s ads are not converting, but it thinks every extra 10 basis points in conversion could mean 17 more points of net revenue growth.
“When APP gets better at ad targeting, it sees gains in unit economics, growth, and margins,” Morgan Stanley analysts Matthew Cost and Brian Nowak said, per Barron’s. The report also pointed to a potential $1,100 bull-case target for the stock by 2030, if conversion rates keep rising. Barron’s
The rest of the market mostly held steady. SPY, the ETF tracking the S&P 500, edged up 0.3%. QQQ, which mirrors the Nasdaq 100, moved up 0.5%.
AppLovin posted strong Q1 results earlier this month. In a May 6 SEC filing, the company reported revenue up 59% to $1.84 billion, net income up 109% to $1.21 billion, and adjusted EBITDA up 66% to $1.56 billion. For the second quarter, it set guidance for revenue between $1.915 billion and $1.945 billion.
AppLovin CEO Adam Foroughi told investors the company is set to open Axon more broadly in June. He called this “a major milestone” and said, “For 14 years, we have been a closed platform.” CFO Matt Stumpf said tech improvements in gaming helped first-quarter revenue, along with more business from consumer advertisers like e-commerce brands. Q4 Capital
AppLovin bulls are focused on more advertisers, improved targeting, and high conversion, while margins stay strong. According to Barchart, which referenced a Morgan Stanley thesis, shares of AppLovin jumped 24.85% in the past five days and added 10.42% on Wednesday as the conversion rate debate resurfaced.
Competition is there. Zacks, cited in a peer comparison by TradingView, said The Trade Desk focuses on programmatic ads, touting reach and transparency. Unity Software ties into ads through its developer and monetization tech. Morgan Stanley looked at AppLovin’s conversion gap versus Meta Platforms, which is still the bigger name in digital ads.
But there’s a clear risk in the trade. If conversion gains slow, the June self-serve launch misses the mark for non-gaming demand, or bigger platforms put pressure on prices, defending the current valuation could get tough. Zacks notes AppLovin is at 33.41 times forward earnings, compared to 23.6 for the sector, and gives the stock a Zacks Rank #3, or Hold. AppLovin’s own filings point to competition in advertising and new tech or business models as risks.
Investors right now are looking at AppLovin as more of an AI ad platform with strong margins, not just another mobile-ad stock. June will be key—AppLovin has to open up its platform, get advertisers in, and prove its conversion numbers still stack up.
