Analyst Bullish on AppLovin, Dismisses Google's 'Project Genie' and Meta Bidding as Near-Term Threats
In a note to clients this week, Piper Sandler analyst James Callahan stood firm on his bullish outlook for mobile technology giant AppLovin (NASDAQ: APP), reiterating an Overweight rating and an $800 price target. The call comes despite recent sector volatility triggered by announcements from tech behemoths Google and Meta.
The firm contends that fears surrounding two key developments—Google's unveiling of its "Project Genie" AI prototype and reports of Meta bidding more aggressively for mobile gaming ad inventory—are overblown. Piper Sandler views AppLovin's current valuation as compelling, especially against a backdrop of solid underlying business metrics.
"The sell-off last Friday seemed more like a knee-jerk reaction than a fundamental reassessment," Callahan noted, referencing the market's response to Google's beta launch of Project Genie. The AI research project, which allows for the creation of interactive worlds from text or images, is seen as a long-term experimental endeavor rather than an imminent threat to established gaming and ad tech ecosystems.
Supporting the bullish thesis, the analyst pointed to AppLovin's consistent supply-side growth, with sellers.json data indicating year-over-year growth of approximately 30%. Furthermore, app-ads.txt data aligns with management commentary that volume growth across its MAX solution remains in the low double-digits.
While the potential competitive shift from Meta's bidding behavior is acknowledged as a point to monitor, Piper Sandler suggests it is too early to characterize recent moves as anything more than limited tests. The core investment narrative for AppLovin, they argue, remains intact: its AI-powered marketing platform is well-positioned to capitalize on sustained mobile gaming and app monetization trends.
Market Voices: A Split Reaction
Michael Chen, Portfolio Manager at Horizon Capital: "Piper's take is rational. The market often misprices the near-term impact of flashy R&D projects like Genie. AppLovin's moat in ad optimization and its first-party data are not easily replicated by a research prototype."
Sarah Jennings, Independent Tech Analyst: "This feels like selective hearing. Dismissing Google's AI ambitions in creative spaces is short-sighted. Genie symbolizes a paradigm shift in content creation. While the threat isn't quarterly, it's existential for anyone in the game supply chain. Analysts are defending their positions, not thinking disruptively."
David Park, Founder of AppGrowth Insights: "The operational data cited is key. Consistent double-digit supply growth in this environment is no small feat. It shows AppLovin's platform retains publisher loyalty, which is the real barrier to entry for anyone, including Meta or Google."
Rebecca Frost, VP at a Mid-Sized Gaming Studio: "As a publisher using MAX, our fill rates and RPMs have been stable. The analyst commentary matches what we see on the ground. The 'Meta bidding' chatter has caused more anxiety in boardrooms than actual disruption to our revenue streams so far."