"Needham analyst Bernie McTernan identified key growth areas in the digital advertising sector, focusing on the evolving dynamics of e-commerce and mobile gaming. The company's shift towards self-service platforms and the integration of AI technologies are expected to enhance its revenue streams significantly, particularly from mobile gaming and e-commerce advertising. This strategic pivot is anticipated to mitigate typical seasonal fluctuations and drive quarter-over-quarter growth in early 2026."
"McTernan indiciated in the note that that AppLovin is at the forefront of integrating AI into advertising, as the company utilizes its AXON platform to optimize ad placements dynamically. This AI-driven approach is not only enhancing user engagement but also maximizing ad revenue potential, setting a new standard in the digital advertising space. According to the note, the market has shown positive responses to AppLovin's strategic moves, with notable increases in "pixel adds" and engagement from major brands like Kalshi and Etsy."
Shares rose after an upgrade to buy with a $700 price target, driven by expectations around AXON 2 capturing significant ad market share. AXON's AI-driven ad optimization and a shift toward self-service platforms are expected to boost revenue from mobile gaming and e-commerce advertising, smoothing seasonality and supporting quarter-over-quarter growth into early 2026. Market indicators include increased pixel adds and engagement from brands such as Kalshi and Etsy, signaling higher e-commerce spending through the platform. Recent pullbacks are considered temporary, and long-term upside potential is tied to a rapid advertising ramp similar to TikTok's growth.
Read at Benzinga
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