TLDR
- AppLovin stock dropped 17% Friday after Google DeepMind announced Project Genie, an AI platform that creates games from text and images.
- Benchmark Equity Research maintained its Buy rating with a $775 price target, arguing AppLovin’s advertising business remains protected.
- AppLovin sold its game development business in 2025 and now focuses entirely on advertising and monetization.
- Analysts believe easier game creation could increase competition and experimentation, helping performance advertising platforms like AppLovin.
- Evercore ISI maintained its Buy rating on January 30, with market consensus showing an average price target of $746.80 across 32 analysts.
AppLovin shares jumped 7.4% in premarket trading Monday after a brutal Friday selloff. The stock had plunged 17% when Google announced Project Genie.
Project Genie is Google DeepMind’s new AI platform. It lets users create game worlds from text and images without traditional game engines.
The announcement sent shockwaves through gaming stocks. Unity Software and Roblox also tumbled as investors worried about disruption.
But Benchmark Equity Research pushed back hard on the panic. The firm maintained its Buy rating and $775 price target in a Monday note.
Analyst Mike Hickey explained why AppLovin’s business model is insulated. The company sold its mobile game development business in 2025.
Today, AppLovin focuses on advertising and monetization. It helps developers acquire users and make money from their games.
“AI-native creation changes how games are built, but not how they are discovered, acquired, or monetized,” Hickey wrote. AppLovin sits at the monetization and discovery layer, not content creation.
Lower Costs Could Mean More Games
The analyst acknowledged that AI tools will lower game development costs. That could lead to shorter game lifecycles and faster player churn.
Individual games might spend less on user acquisition. But total advertising dollars wouldn’t necessarily drop.
Easier game creation means more developers will ship more games. That creates more competition and experimentation in the market.
“Historically, such fragmentation benefits performance advertising platforms,” Hickey said. Advertisers rely more heavily on automated tools to stand out in crowded markets.
Benchmark believes developers will package Genie-created games as standalone apps. They’ll distribute them through Android and iOS app stores rather than keeping them in Google’s ecosystem.
Strong Analyst Support Continues
Evercore ISI also maintained its Buy rating on January 30. The firm called a recent price drop “incorrect directionally.”
Market consensus remains bullish on AppLovin. The average price target across 32 analysts sits at $746.80, according to MarketWatch.
The stock has traded in a wide 52-week range between $200.50 and $745.61. That volatility reflects both the company’s transformation and broader market swings.
AppLovin’s market cap stands near $160 billion. The company has successfully pivoted from game developer to pure advertising platform.
Shares closed Friday at $507.94 before Monday’s premarket rally. The stock has gained 4.46% as investors digest the analyst commentary and reconsider Friday’s panic selling.
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