AppLovin's Q3 Beat Limits Downside, But Long-Term Growth Visibility Remains Uncertain, BofA Says

11:36 AM EST, 11/05/2026 (MT Newswires) -- AppLovin (APP) delivered a significant Q3 revenue beat, supported by the partial rollout of its new predictive model architecture, while improved infrastructure efficiency helped restore gross margins, BofA said in a Thursday note. According to the report, revenue rose 14% sequentially to $2.19 billion, significantly beating expectations, while gross margin rebounded about 700 basis points to 89.6% as infrastructure efficiencies offset higher computing costs. Consumer revenue increased 11% sequentially to $348 million. For Q4, revenue guidance implies sequential growth of about 10% at the high end. BofA remained cautious about the timing of further model improvements, noting that management maintained its 30% long-term growth target but could not specify when the full rollout would occur. BofA raised its 2027 revenue growth estimate to 25% from 23% but said further evidence is needed to support sustained hypergrowth, given increased execution risks as the business scales. BofA maintained its neutral rating on the stock while raising its price target to $380 from $325. AppLovin shares were up 28% in Thursday trading. Price: 351.56, Change: +79.81, Percent Change: +29.37