AppLovin convinces analysts and reaches new heights

The shares of the mobile app technology company AppLovin saw a remarkable increase of 3.9% in afternoon trading after analysts from UBS and Piper Sandler significantly raised their price targets for the stock. UBS reaffirmed its 'Buy' rating for AppLovin and increased the price target by 50% to $810. Similarly, Piper Sandler maintained its 'Overweight' rating and raised the price target from $500 to $740. Analysts were particularly pleased about the upcoming soft launch of the new Axon Ads Manager. The positive response from Wall Street underscores great confidence, with analysts describing the company as a "top pick" with the "potential to become a leading player in the advertising industry." After the initial surge, the shares stabilized at $665.41, which represents a 4% increase compared to the previous day's close. Whether now is the right time to invest in AppLovin remains to be seen. The stock has shown extreme volatility in the past, with over 57 fluctuations of more than 5% in the last year, indicating that the market closely observes developments but does not perceive any fundamental change in business perception. A significant increase was recorded 16 days ago when the stock rose by 2.1% following its inclusion in the S&P 500 Index. The inclusion in this prestigious index leads to structural buying pressure, as passive funds and ETFs that track the S&P 500 must purchase AppLovin shares. This development increases credibility and often attracts more institutional investors. On Wednesday, the positive price trend was supported by overall market strength, as both the S&P 500 and Nasdaq rose. Additionally, the company's recent strong financial performance, including a 77% revenue growth in the second quarter, supports investor confidence. Since the beginning of the year, AppLovin has risen by 94.7% and has reached a new 52-week high with a price of $665.41. Investors who bought AppLovin shares worth $1,000 at the IPO in April 2021 would now look at an investment of $10,207. A wise strategy could also be to identify seemingly modest but high-growth stocks that benefit from megatrends such as the rise of AI. Such investments could prove to be groundbreaking, similar to the success stories of Microsoft, Alphabet, Coca-Cola, or Monster Beverage.