AppLovin (NASDAQ: APP) was initiated with an Outperform rating and an $835 price target by Evercore ISI, implying roughly 25% upside.

Evercore said AppLovin was the dominant advertising technology platform in mobile gaming, with a rapidly emerging e-commerce performance advertising channel that meaningfully expands its total addressable market. The firm expected mobile gaming and e-commerce ad spend combined to drive revenue and EBITDA compound annual growth rates exceeding 30% from 2025 through 2028.

The analyst forecast mobile gaming ad spend growth of approximately 23% annually through 2028, citing strong industry fundamentals and AppLovin's execution. While it remained early to determine whether AppLovin could become a fourth scaled digital marketing platform for e-commerce alongside Google, Meta, and Amazon, Evercore pointed to strong industry checks and third-party tracking data indicating accelerating momentum.

Evercore estimated that AppLovin could capture high-single-digit to low-double-digit penetration of direct-to-consumer e-commerce ad spend by fiscal 2028, translating to $3.4 billion in revenue from a $7.5 billion spend base, within a broader $75 billion to $150 billion ad market.

The firm said regulatory and platform risks appeared remote. In a downside scenario involving selective enforcement of conversion tracking practices, Evercore said AppLovin's e-commerce business could be pressured while its mobile gaming franchise remained intact. In a uniform enforcement scenario, the firm said AppLovin could actually gain market share.

The $835 price target was based on a 35x multiple applied to Evercore's 2027 EBITDA forecast of $8.35 billion, assuming the company largely maintains its current valuation multiple on a forward basis.