AppLovin's Axon Surge Indicates Robust Fourth Quarter, Analyst Reports

AppLovin Shares Rise on Growing Adoption of Axon Platform

AppLovin Corporation (NASDAQ: APP) saw its stock price increase on Wednesday, driven by fresh data indicating a surge in the use of its Axon advertising platform.

Recent industry checks reveal that the company onboarded several hundred new e-commerce advertisers in December, highlighting sustained momentum and raising expectations for its fourth-quarter performance.

Analyst Endorsement and Stock Performance

Omar Dessouky, an analyst at Bank of America Securities, reaffirmed his Buy recommendation for AppLovin shares, maintaining a price target of $860.

According to Benzinga Pro, APP stock has soared more than 94% over the past year. Investors can also access exposure to the stock through the Tradr 2X Long APP Daily ETF (NASDAQ: APPX).

Expansion of E-Commerce Advertiser Network

Dessouky reported that the Axon pixel network now covers nearly 4,000 merchants, reflecting a 13% monthly increase. His research found that approximately 450 net new trackers were added in December, further expanding the advertiser base.

He observed that 73% of these new merchants were from Shopify, with 43% representing Shopify Plus users.

The December additions were primarily smaller businesses, suggesting that AppLovin is reaching deeper into the broader market. Dessouky noted that the monthly influx of around 450 e-commerce "referral" advertisers aligns with his projections and does not pose a risk to his model.

This growth rate is consistent with his forecast of about 400 new advertisers joining each month through 2026.

Potential Catalysts for Fourth-Quarter Results

Dessouky believes that fourth-quarter e-commerce outcomes could surpass company guidance for two main reasons. First, he suggests that the guidance may not fully account for the acceleration in new advertiser sign-ups during November and December.

Second, he points out that management may have had limited insight into holiday spending plans from advertisers prior to referral.

Feedback from agencies indicates that ad spending often increases when returns exceed initial budget expectations.

Additionally, prospecting campaigns may have tapped into new demand from advertisers who previously faced limits on customer acquisition.

Valuation Insights

Dessouky commented that AppLovin’s stock may remain within a certain range until management provides updates on holiday e-commerce advertising spend. He referenced Northbeam data, which showed a slight week-over-week dip in Axon’s budget share during the Christmas period.

He also highlighted that the company’s valuation—trading at 28 times enterprise value to projected 2026 EBITDA—appears favorable compared to other large-cap peers following the Rule of 40.

Furthermore, the anticipated launch of self-service GA in the first half of 2026 could potentially boost estimates for that year.

Recent Stock Movement

APP Price Action: As of Wednesday’s publication, AppLovin shares had risen 3.12% to $636.49, according to Benzinga Pro.

Image via Shutterstock

Stock Overview

• APP (AppLovin Corp): $640.68 (+3.80%)
• APPX (Tradr 2X Long APP Daily ETF): $31.60 (+7.30%)