- Piper Sandler explained its optimistic outlook for AppLovin, stating that there is a broader skepticism in the industry about the practical use of artificial intelligence in monetizing mobile gaming inventory.
- The firm stated that it sees difficulties in adopting the AI-powered product from AppLovin’s latest rival, CloudX.
- After a closed beta testing round in late 2025, CloudX announced the general availability of its mobile ad monetization technology in February.
AppLovin Corp.’s (APP) position as the market leader in the mobile gaming landscape is intact, according to analysts at Piper Sandler.
According to TheFly, the firm maintained its ‘Overweight’ rating on the stock after a conversation with an advertising monetization expert. The firm’s findings come amid recent competitive developments in the mobile gaming industry.
The average 12-month price target for the APP stock is $648.57, according to Koyfin data. Of the 28 analysts covering the stock, seven have a ‘Strong Buy’ recommendation, while 17 have a ‘Buy’ rating. Four analysts have a ‘Hold’ suggestion.
AppLovin shares fell more than 8% in Thursday’s opening trade amid investor concerns of disruption due to AI.
Why Is Piper Sandler Optimistic About AppLovin?
Piper Sandler explained its optimistic outlook for AppLovin, stating that there is a broader skepticism in the industry about the practical use of artificial intelligence in monetizing mobile gaming inventory.
The firm stated that it sees difficulties in the adoption of the AI-powered product from AppLovin’s latest rival, CloudX.
After a closed beta testing round in late 2025, CloudX announced the general availability of its mobile ad monetization technology in February. The launch came days before AppLovin’s fourth-quarter (Q4) results.
What Is CloudX?
CloudX was co-founded by the creators of popular mobile advertising services, MoPub and MAX. The company is backed by a $30 million Series A led by Addition, with participation from DST Global, Terrain, and seed investors ENIAC, Javelin, and Breakpoint Capital.
“CloudX brings transparency, intelligent automation, and adaptive optimization to the supply side so publishers can finally operate on equal footing in an AI-driven ecosystem,” said CloudX co-founder and CEO Jim Payne.
CloudX states that its stack offers adaptive optimization to the ad infrastructure, allowing publishers to integrate the technology in apps and games within fifteen minutes, while allowing them to configure their setup conversationally.
Cleveland Research Highlights Scale Challenges
According to an Investing.com report citing a recent note from Cleveland Research, e-commerce brands highlighted challenges with scale and diminishing return on investment.
The report also states that AppLovin’s customers are citing creative challenges with AppLovin’s platform, resulting in limited media spending as well as preventing new customers from joining.
According to data from Tenjin, AppLovin held a 42% ad revenue share on iOS and 19% on Android in the third quarter (Q3) of 2025, Meta Platforms Inc. (META) is said to be working to compete more directly in the space, according to the report. This includes an initial outreach to AppLovin rival CloudX.
However, the firm stated that AppLovin is unlikely to cede market share thanks to the strengths of its Max tool, which offers better data and insights.
How Did Stocktwits Users React?
Retail sentiment on Stocktwits around AppLovin trended in the ‘bearish’ territory. APP was among the top trending tickers on the platform at the time of writing.
One user stated that the drop in APP stock could be linked to fears of an AI disruption.
Another user called AppLovin a “very risky stock.”
APP stock is down 39% year-to-date, but up 26% over the past 12 months. The Invesco QQQ Trust ETF (QQQ) is up 19% over the past 12 months, while the iShares Core S&P 500 ETF (IVV) is up 14%.
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