AppLovin (APP) stock surged 6.2% in Thursday’s pre-market trading, as the artificial intelligence (AI)-powered mobile ad-tech company delivered better-than-expected results for the third quarter of 2025. Moreover, the company issued upbeat fourth-quarter guidance amid continued momentum in its business.
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As of Wednesday’s closing, AppLovin stock has rallied about 91% year-to-date. However, it has pulled back about 10% over the past month amid news of an investigation by the U.S. Securities and Exchange Commission (SEC) into the company’s data-collection practices. According to a Bloomberg report, the SEC investigation was triggered by a whistleblower complaint and multiple short-seller reports.
AppLovin Delivers Robust Q3 Results
AppLovin’s Q3 revenue surged 68% year-over-year to $1.41 billion, surpassing the Street’s estimate of $1.34 billion. The company attributed the strong growth in its top line to the improved performance of its Axon Advertising platform. Meanwhile, earnings per share (EPS) jumped 96% to $2.45, ahead of the consensus estimate of $2.38.
Looking ahead, AppLovin expects its Q4 revenue to be in the range of $1.57 billion to $1.60 billion compared to analysts’ forecast of $1.55 billion. The company expects its Q4 adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to be between $1.29 billion and $1.32 billion.
Investors also reacted positively to the increase in AppLovin’s share repurchase plan by $3.2 billion, bringing the total remaining share repurchase authorization to $3.3 billion as of the end of October. In the third quarter, AppLovin repurchased 1.3 million shares for $571 million.
Analysts Lift Price Target for AppLovin Stock
Following the Q3 print, Goldman Sachs analyst Eric Sheridan increased his price target for AppLovin stock to $720 from $630 and maintained a Hold rating. The 4-star analyst noted that APP’s Q3 results reflect solid ad revenue, driven by the continued success of the AXON 2.0 platform and the company’s non-gaming business. Sheridan also highlighted AppLovin’s ability to deliver enhanced margins, despite near-term investments in cloud hosting and paid advertiser acquisition spend.
Sheridan expects AppLovin to maintain an incremental adjusted EBITDA margin of 85% over the long term. He continues to believe that investors will focus on the trajectory of the expansion of the e-commerce business heading into 2026.
Meanwhile, BTIG analyst Clark Lampen increased his price target for AppLovin stock to $705 from $693 and reiterated a Buy rating, saying that AppLovin remains a BTIG Top Pick. Lampen noted that the company’s Q3 beat was driven by encouraging sequential growth in the gaming business and a notable quarter-over-quarter rise in the non-gaming segment. “Bottom line, we still see a lot to play for over the next 2-3 quarters from a revision standpoint and expected the near-term datapoints/narrative to remain supportive of the story,” said the analyst.
Is APP a Good Stock to Buy?
Currently, Wall Street has a Strong Buy consensus rating on AppLovin stock based on 18 Buys and two Hold recommendations. The average APP stock price target of $682.56 indicates 10.6% upside potential.
These ratings/price targets are expected to be revised as analysts react to AppLovin’s Q3 print.
