Deutsche Bank Reaffirms Buy Rating on Roblox Amid Google Deal

Deutsche Bank reaffirmed its Buy rating on Roblox Corporation (NYSE:RBLX) shares on May 19, with a price target of $78. The report followed the announcement of a new partnership between Roblox and Google for Rewarded Video Ads.

With plans to scale distribution even further in the near future, Roblox's partnership with Google will utilize AdMob and Google Ad Manager to increase the reach of its ads. Early indicators point towards the strategy's effectiveness, with positive user reviews and high ad completion rates reported by Deutsche Bank. The firm also states that Rewarded Video Ads could generate an additional $150 million to $300 million in ad revenue by 2026, representing a 2% to 5% increase over Roblox's current projections for that fiscal year.

In addition, the new feature is expected to have a positive financial impact on Roblox's EBITDA. With a 20% commission to Google and a 40% to 50% revenue share with content creators, the additional EBITDA for FY26 is projected to be between $50 million and $120 million, representing a 3% to 8% increase over Deutsche Bank's estimates.

While we acknowledge the potential of RBLX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than RBLX and that has 100x upside potential, check out our report about the cheapest AI stock.

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