Jefferies reiterated its Buy rating and $460 price target on AppLovin (NASDAQ:APP) ahead of the company’s upcoming first-quarter earnings on May 7, expressing confidence in both near-term results and the broader ad market backdrop.
The firm highlighted strength in AppLovin’s gaming ad segment and growing traction with e-commerce advertisers as key drivers of potential revenue upside in Q1 and guidance strength in Q2. Initial concerns about tariff-related headwinds have eased, thanks to reassuring results from Meta, Google, and Reddit, which suggest advertising demand remains solid.
Jefferies noted that new advertiser additions—a key growth metric—appear to be exceeding the expected pace of 100 per month, which could provide further momentum. The firm also pointed to growing evidence that AppLovin is becoming a top-three advertising channel for many e-commerce brands, with some allocating more than 10% of their ad budgets to the platform.
If the company reports over 60% year-over-year ad revenue growth in Q1 and offers at least mid-single-digit sequential revenue growth guidance for Q2, Jefferies expects the stock to respond positively—especially given its 40% decline since early February.
