"Applovin Corporation (NASDAQ: APP) is emerging as a major force in digital advertising, reshaping the mobile gaming ecosystem into a powerful channel for e-commerce engagement. Bank of America said AppLovin's mobile gaming ecosystem appears capable of absorbing the surge in e-commerce ad demand expected through 2026, citing strong supply growth and improving conversion efficiency. The brokerage reiterated its Buy rating and $860 price forecast, implying a 36.6% upside from the current share price of $629.70."
"Analyst Omar Dessouky said AppLovin has begun transforming mobile gaming into a major channel for e-commerce merchants, who are forecast to spend $6.8 billion in 2026, up from about $1.8 billion in 2025. While investors remain concerned that the increase in e-commerce ads could cannibalize gaming inventory, Bank of America expects technology-driven conversion gains and modest supply expansion to accommodate new demand."
"AppLovin's MAX ad supply has grown at roughly 20% CAGR since 2022 and could accelerate to 34% year-on-year in 2026, the report said. Bank of America said 25-40% of total mobile gaming engagement occurs in titles that do not currently display ads, highlighting a large untapped opportunity if these publishers begin accepting e-commerce advertising. The firm noted that while many developers remain reluctant to add ads for fear of disrupting gameplay, higher CPMs and the rise of hybrid monetization models could make adoption more appealing."
AppLovin's mobile gaming ecosystem appears capable of absorbing large e-commerce ad demand through 2026, supported by supply growth and improving conversion efficiency. Bank of America reiterated a Buy rating and an $860 price target. Mobile e-commerce merchant spending is forecast to grow to $6.8 billion in 2026 from $1.8 billion in 2025. MAX ad supply has grown roughly 20% CAGR since 2022 and could reach 34% year-over-year in 2026. An estimated 25–40% of gaming engagement occurs in titles that do not currently display ads, creating a sizable untapped opportunity. Developer reluctance may limit adoption, but higher CPMs, hybrid monetization, and conversion gains could unlock about $8 billion of additional ad-spend capacity. Overall mobile-gaming engagement rose 7–9% year-to-date, with smaller games outpacing the top 200 titles.
Read at Benzinga
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