Buy the Dip on AppLovin—Morgan Stanley Still Sees Big Upside

​Morgan Stanley just gave a vote of confidence to one of ad tech’s top performers—even after a rough start to the year.

Despite AppLovin (APP) falling 16% in 2025 following an eye-popping 712% surge in 2024, analyst Matthew Cost upgraded the stock to overweight from equal weight. He lowered the price target to $350 from $470, but that still implies a 27% upside from current levels.

Cost calls AppLovin “ad tech’s best executor,” citing the company’s strong track record in direct response advertising and its ability to outperform peers even in tough markets. He sees the recent selloff—partly due to short seller pressure—as an opportunity for long-term investors to get in at a more reasonable valuation.

The company’s in-app gaming ad business is also looking more achievable, and Cost believes AppLovin is well-positioned to continue gaining market share, while expanding into non-gaming ad markets as well. His forecast? A 30% compound annual growth rate (CAGR) for ad revenue from 2024 through 2027.

“APP shares are now priced for a more achievable path forward,” Cost wrote, “with non-gaming becoming a key engine of growth.”

​Bottom line: The stock may be down, but Morgan Stanley says AppLovin’s execution, innovation, and market position make this a dip worth buying.