AppLovin's Merchant Boom Hints At Q4 Upside, Analyst Says

**AppLovin** **Corp**. (NASDAQ: APP) is gaining fresh momentum in its ecommerce push as new data shows a sharp jump in merchants adopting its Axon ad tech, setting the stage for a potential upside surprise in the fourth quarter.

The accelerating footprint signals rising advertiser demand at a moment when expectations for year-end revenue have softened.

**Bank of America Securities** analyst **Omar Dessouky** reiterates a Buy rating on AppLovin with a $860 price forecast (approximately 32% upside from $653), arguing that the shares still offer a strong blend of growth momentum and valuation support.

## Expanding Axon Adoption Among Merchants

Based on third-party tracking, Dessouky estimates Axon’s pixel footprint across ecommerce merchant sites rose about 25% month over month in November, lifting total installs to roughly 3,500 merchants by November 30 (up from ~800 on September 30). Shopify merchants drove close to 80% of new pixel installations.

He also cites Triplewhale data showing 413 active shops advertising through November month-end, signaling strong onboarding since early October. In his view, the key swing factor is the expanding advertiser base going into the holidays.

## Fourth-Quarter Setup and Revenue Expectations

Dessouky says fourth-quarter 2025 expectations likely softened after the third-quarter print because company guidance didn’t fully reflect spend from newly added advertisers in November and December.

He keeps his $340 million ecommerce net revenue outlook, even if the new cohort spent under $20 million through October 31 and skews smaller in GMV.

He adds that the bar is not demanding: average daily spend of roughly $2,000 per merchant could support his forecast, leaving room for a fourth-quarter upside surprise if engagement persists.

Management comments add confidence. On December 3, 2025, executives stated that Axon ecommerce should be open to all merchants in the first half of 2026, noted that prospecting campaigns are working extremely well, and pointed to a multi-year ad-load upside as ad durations compress.

Dessouky reiterates Buy with an $860 price objective (about 32% upside from $653), based on 39x EV/CY26E EBITDA and at least 20% YoY growth supported by gaming ads alone.

**APP Price Action:** AppLovin shares were up 1.06% at $659.91 at the time of publication on Wednesday, according to Benzinga Pro data.

<p><strong>AppLovin</strong> <strong>Corp</strong>. <a target="_blank" href="https://www.benzinga.com/quote/APP" rel="noreferrer noopener"><a href="https://www.benzinga.com/quote/APP" target="_blank" class="ticker-link" data-ticker="APP" data-exchange="NASDAQ" rel="noopener">(NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/APP">APP</a>)</a></a> is gaining fresh momentum in its ecommerce push as new data shows a sharp jump in merchants adopting its Axon ad tech, setting the stage for a potential upside surprise in the fourth quarter.</p>



<p>The accelerating footprint signals rising advertiser demand at a moment when expectations for year-end revenue have softened.</p>



<p><strong>Bank of America Securities</strong> analyst <strong>Omar Dessouky</strong> reiterates a Buy <a target="_blank" href="https://www.benzinga.com/quote/APP/analyst-ratings" rel="noreferrer noopener">rating</a> on AppLovin with a $860 price forecast (approximately 32% upside from $653), arguing that the shares still offer a strong blend of growth momentum and valuation support.</p>



<p><strong><em>Also Read: <a target="_blank" href="https://www.benzinga.com/analyst-stock-ratings/reiteration/25/11/48698644/this-goldman-sachs-analyst-raised-his-forecast-for-applovin-heres-why" rel="noreferrer noopener">This Goldman Sachs Analyst Raised His Forecast For AppLovin &#8211; Here&#8217;s Why</a></em></strong></p>



<p>He sees Axon&#8217;s ecommerce push shifting from early experimentation to visible adoption, setting up a quarter where results can outrun recently softened expectations.</p>



<h2 class="wp-block-heading">Expanding Axon Adoption Among Merchants</h2>



<p>Based on third-party tracking, Dessouky estimates Axon&#8217;s pixel footprint across ecommerce merchant sites rose about 25% month over month in November, lifting total installs to roughly 3,500 merchants by November 30 (up from ~800 on September 30). Shopify merchants drove close to 80% of new pixel installations.</p>



<p>He also cites Triplewhale data showing 413 active shops advertising through November month-end, signaling strong onboarding since early October. In his view, the key swing factor is the expanding advertiser base going into the holidays.</p>



<h2 class="wp-block-heading">Fourth-Quarter Setup and Revenue Expectations</h2>



<p>Dessouky says fourth-quarter 2025 expectations likely softened after the third-quarter print because company guidance didn&#8217;t fully reflect spend from newly added advertisers in November and December.</p>



<p>He keeps his $340 million ecommerce net revenue outlook, even if the new cohort spent under $20 million through October 31 and skews smaller in GMV.</p>



<p>He adds that the bar is not demanding: average daily spend of roughly $2,000 per merchant could support his forecast, leaving room for a fourth-quarter upside surprise if engagement persists.</p>



<p>Management comments add confidence. On December 3, 2025, executives stated that Axon ecommerce should be open to all merchants in the first half of 2026, noted that prospecting campaigns are working extremely well, and pointed to a multi-year ad-load upside as ad durations compress.</p>



<p>Dessouky reiterates Buy with an $860 price objective (about 32% upside from $653), based on 39x EV/CY26E EBITDA and at least 20% YoY growth supported by gaming ads alone.</p>



<p><strong>APP Price Action:</strong> AppLovin shares were up 1.06% at $659.91 at the time of publication on Wednesday, <a target="_blank" href="https://www.benzinga.com/pro/" rel="noreferrer noopener">according to Benzinga Pro data</a>.</p>



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<p><em>Photo via Shutterstock</em></p>