AppLovin and Atlassian: AI-Driven Investment Opportunities

Written by Emily J. Thompson, Senior Investment Analyst

APP+0.47%

META+1.72%

MS-2.21%

Source: Fool

Updated: 3d ago

0mins

Source: Fool

Software Industry Underperformance: The North American Technology Software Index has underperformed the S&P 500 by 19 percentage points over the past year, marking the worst relative performance since the 2022 bear market, reflecting investor concerns about AI disrupting traditional business models.
AppLovin's Growth Potential: AppLovin's median target price of $774.50 implies a 45% upside from its current price of $533, with adjusted earnings expected to grow at 58% annually through 2027, showcasing its strong performance and market opportunity in ad tech.
Atlassian's Market Advantage: Atlassian's median target price of $225 indicates an 84% upside from its current price of $122, with adjusted earnings projected to increase by 22% annually through 2027, bolstered by high R&D investment and a unique work management platform that positions it well in the AI boom.
Strategic Significance of AI: Both companies leverage AI to enhance product efficiency, with AppLovin's Axon recommendation engine achieving a 45% higher return on ad spending, while Atlassian's Rovo generative AI features improve collaboration efficiency across teams, indicating strong growth potential in future markets.

APP

$524.41+Infinity%1D

Analyst Views on APP

Wall Street analysts forecast APP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for APP is 763.44 USD with a low forecast of 650.00 USD and a high forecast of 860.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

20 Analyst Rating

17 Buy

3 Hold

0 Sell

Strong Buy

Current: 521.940

Low

650.00

Averages

763.44

High

860.00

Current: 521.940

Low

650.00

Averages

763.44

High

860.00

Piper Sandler

Overweight

maintain

$800

2026-01-20

Reason

Piper Sandler

Price Target

$800

AI Analysis

2026-01-20

maintain

Overweight

Reason

Piper Sandler notes that a short report targeting AppLovin was released last night that alleges pre-IPO investors used illegal funds as the source of their investment and that AppLovin has become a vehicle for laundering illicit funds from Chinese and Southeast Asian criminal networks. However, the report "provides little evidence to support the claims," according to the analyst, who thinks investors will look past this report. The firm reiterates an Overweight rating and $800 price target on AppLovin shares.

Wells Fargo

Alec Brondolo

Overweight

maintain

$721 -> $735

2026-01-08

Reason

Wells Fargo

Alec Brondolo

Price Target

$721 -> $735

2026-01-08

maintain

Overweight

Reason

Wells Fargo analyst Alec Brondolo raised the firm's price target on AppLovin to $735 from $721 and keeps an Overweight rating on the shares. Ahead of quarterly results, the firm is raising Q4 revenues 3% on strong mobile game checks. Web ads trends are mixed, Wells says, adding that advertisers are positive on prospecting but existing advertiser wallet share should be about flat year-over-year. The firm sees Q1 consensus as a high bar given APP history of conservative guidance. Overall, Wells sees another tough setup.

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BTIG

Buy

maintain

$705 -> $771

2025-12-17

Reason

BTIG

Price Target

$705 -> $771

2025-12-17

maintain

Buy

Reason

BTIG raised the firm's price target on AppLovin to $771 from $705 and keeps a Buy rating on the shares. The firm is constructive on the setup for the gaming and gambling end markets it covers heading into 2026 and its higher price target is the reflection of expected healthier gaming user acquisition trends in Q4 and beyond, the analyst tells investors in a research note.

Benchmark

Mike Hickey

Buy

maintain

$700 -> $775

2025-12-11

Reason

Benchmark

Mike Hickey

Price Target

$700 -> $775

2025-12-11

maintain

Buy

Reason

Benchmark analyst Mike Hickey raised the firm's price target on AppLovin to $775 from $700 and keeps a Buy rating on the shares. After having reviewed AppLovin's Q3 earnings and management's subsequent discussions at the UBS Global Technology and AI Conference and the Nasdaq Investor Conference, the firm contends that the company's prospects have strengthened, citing accelerating e-commerce traction, a clear roadmap to scale AXON Ads self-serve, expanding Gen AI creative capabilities, and sustained margin durability. AppLovin remains one of the firm's "Best Ideas," the analyst noted.

About APP

AppLovin Corporation is a marketing platform. The Company provides end-to-end software and artificial intelligence (AI) solutions for businesses to reach, monetize and grow their global audiences. Its advertising solutions include a comprehensive suite of tools including AppDiscovery, MAX, Adjust, Wurl and Axon Ads Manager. AppDiscovery is powered by AXON, its AI-powered advertising engine, and matches advertiser demand with publisher supply through auctions at vast scale and at microsecond-level speeds. MAX is its monetization solution, utilizing an advanced in-app bidding technology that optimizes the value of a publisher’s advertising inventory by running a real-time competitive auction, driving more competition, and higher returns for publishers. Adjust is its measurement and analytics marketing platform which provides marketers with the visibility, insights, and data needed to scale their apps marketing and drive more informed results. Wurl is its connected TV (CTV) platform.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.