UBS Reiterates Buy on AppLovin (APP) With $540 PT After Q2 Beat

AppLovin Corporation (NASDAQ:APP) is one of the Hot AI Stocks on Wall Street’s Radar. On August 7, UBS analyst John Hodulik reiterated a Buy rating on the stock with a $540.00 price target. The rating affirmation follows Applovin’s second quarter results, beating Wall Street’s targets and guiding higher for sales in the current period.

The firm increased its fiscal year 2026 EBITDA estimate to $6.18 billion, above the Street consensus of $5.65 billion. This was driven by better-than-expected gaming-related trends in the second and third quarters.

The firm is optimistic that AppLovin’s staggered rollout of its self-serve web-based ad platform, which begins in October, reduces medium-term risk for web-based advertising revenue growth. The rollout will start with referral-based advertisers before moving to general availability in the first half of 2026.

This will allow the company to deliver multi-quarter revenue growth particularly with expansion into international markets.

Once the ad platform becomes generally available, advertisers will likely spend faster. The stock dip after-hours is therefore a buying opportunity:

“From here we see scope for GA advertisers to ramp spend faster as they benefit from more iteration on the platform. All-in, we’d take advantage of the AH weakness and reiterate our Buy rating on the basis of attractive risk/reward (2.1x), attractive valuation (37x FY26 P/E vs 42% 3-YR EPS CAGR) and improving catalyst path visibility.”

AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology.

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