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Investing.com -- Jefferies analysts upgraded their price target for AppLovin (NASDAQ:APP) from $108 to $175 in a note Friday, citing optimistic trends in mobile gaming ad spending revealed in their latest survey. 

The survey, representing over $1.2 billion in app install spending, reportedly suggests that major players like APP, Google (NASDAQ:GOOGL) (GOOG), and Meta (NASDAQ:META) are expected to gain market share in 2025, while Unity (NYSE:U) may lose ground.

In their note, Jefferies analysts said the initial outlook for 2025 app install spending indicates a significant acceleration to 6.7% growth. 

While the survey forecasts a modest 2.7% growth for 2024, 2025 is projected to benefit from increased spending on new game launches and successful existing titles. 

"We see this initial view into 2025 as optimistic for the ad networks," stated Jefferies. The analysts also highlighted that ad spending is expected to grow by 3.2% year-over-year in the fourth quarter of 2024.

Moreover, Jefferies reported that APP was the largest share gainer in 2024 and is anticipated to continue this momentum into 2025. 

"APP's user quality and ability to scale spend" were underscored as key advantages. 

The analysts pointed out that the rising cost per install (CPI) on platforms like YouTube and Meta, particularly due to holiday and political spending, could lead to a shift in shares toward mobile-game-specific networks.

Despite pressures on effective cost per thousand impressions (eCPMs), Jefferies forecasts that the overall mobile game ad revenue will experience growth in 2025. 

"Our survey suggests that APP should be able to sustain 20-30% Software Platform revenue growth for at least the next two years," the note added.

With this outlook, Jefferies sees a potential bull case price target of $246 for APP, driven by incremental ad budgets from e-commerce.

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