Wells Fargo is increasing its estimates for AppLovin after the company's better-than-expected first-quarter report. AppLovin posted a earnings and revenue on Wednesday that beat analyst expectations . The company also said it would sell its mobile gaming business in a deal worth $400 This led analyst Alec Brondolo to raise his price target on the stock to $405 from $386. That suggests shares can around 33.5% from where they closed on Wednesday. Brondolo reiterated his overweight rating on shares. "We believe APP has a strong strategic position in the mobile game advertising market, with leading products in user acquisition and ad monetization. As a result, we believe APP will continue to gain share of the $34B market, leaving our 2025 / 2026 revenue estimates meaningfully above consensus," A Brondolo wrote in a Thursday note. "Outperformance comes before the global launch of self-service, which is likely to cause yet another inflection." APP YTD mountain APP year to date AppLovin soared more than 700% last year, making the stock the top performer in the tech sector. However, shares sold off 12% in February on reports from short sellers questioning AppLovin's artificial intelligence-powered Axon advertising software. "Overall, 1Q results / 2Q guidance suggests short reports haven't impacted partner propensity to spend & macro remains steady. We didn't find short allegations credible but saw risk they could impact partner relationships / industry sentiment," according to Brondolo. The stock last traded 15% higher in the premarket. Year to date, shares have slipped more than 6%, but remain up by more than 300% over the last 12 months. Most analysts covering the stock are bullish. LSEG data shows that 22 of 27 analysts covering AppLovin have a buy or strong buy rating. The average price target also signals upside of 54%.
