Needham upgraded AppLovin (NASDAQ: APP) from Hold to Buy and set a price target of $700, following additional analysis that increased confidence in the company’s e-commerce revenue trajectory for 2026.
Shares rose more than 5% intra-day on Monday following the upgrade.
Needham said it raised its 2026 e-commerce revenue estimate to $1.45 billion from $1.05 billion, reflecting expectations for sequential growth in the first quarter. The firm now assumed that advertiser growth from AppLovin’s self-service platform launch and higher spending levels would more than offset typical first-quarter seasonality.
Despite the upward revision, Needham said there remained potential upside to its estimates under a bullish scenario, in which AppLovin’s e-commerce business could follow a revenue trajectory similar to that seen at TikTok. The upgrade also reflected the stock’s recent pullback from highs reached roughly one month earlier, improving the entry point for investors.
