Macquarie began official coverage of AppLovin with an outperform recommendation and a $710 price objective, telling investors the mobile advertising technology company’s push into e-commerce advertising could unlock substantial, multi-year growth despite the stock’s sizable year-to-date decline.
Analyst Aaron Lee described AppLovin’s e-commerce initiative as "an attractive, multi-year growth opportunity," and put the potential total addressable market at $120 billion, with upside to $180 billion by 2030. The firm said its channel checks ahead of the platform’s full e-commerce rollout in the first half of 2026 bolstered confidence that AppLovin has assembled a competitive advertising solution.
Macquarie pointed to AppLovin’s entrenched position in mobile advertising as the basis for expanding into e-commerce. The note emphasized the company’s MAX platform as the leading mediation solution in mobile gaming. Lee also credited the Axon AI model with driving roughly 75% compound annual growth in both revenue and EBITDA over the past three years.
On valuation, Macquarie noted the stock has fallen about 40% year to date and framed the decline as an opportunity. In the firm’s view, those moves already reflect investor concerns about AI and heightened competitive pressures, creating a more attractive entry point ahead of the expected full e-commerce launch.
"At these levels, we believe concerns around AI and competition are reflected in shares, and see the pullback as an attractive opportunity to build a position ahead of the upcoming full launch of the e-commerce platform," Lee wrote.
Lee underscored AppLovin’s recent profitability and growth metrics, saying the company "handily surpasses Software's Rule of 40." He cited advertising revenue growth of 70% and an EBITDA margin of 82% for 2025, and added that those figures imply AppLovin is meeting what he described as the "Rule of 150."
Looking further ahead, Macquarie projected three-year revenue and EBITDA compound annual growth rates of 37%, and forecast EBITDA reaching $11.6 billion by 2028. The report noted these forecasts could prove conservative depending on how quickly AppLovin scales its e-commerce efforts.
Context and implications
Macquarie’s initiation frames AppLovin’s business as a convergence of mobile advertising strength, advanced ad-serving technology and an adjacent e-commerce market opportunity. The firm’s estimates and channel-check assessments position the company as a potential beneficiary across advertising and digital commerce sectors if the rollout matches expectations.