Why AppLovin Stock Popped Today

Shares of AppLovin (NASDAQ: APP) were surging today after the adtech stock caught a tailwind from the broader market recovery on hopes for a détente in the trade war, and as one Wall Street analyst weighed in on the stock with a positive note.

As of 10:32 a.m. ET, the stock was up 9.8%, while the S&P 500 (SNPINDEX: ^GSPC) had gained 3.7%.

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AppLovin gets a boost

After a two-day swoon last week on President Trump's global tariffs that sent the Nasdaq Composite (NASDAQINDEX: ^IXIC) into a bear market, the market seemed to be finding its footing as reports of negotiations with countries like Japan and Vietnam led investors to believe that the trade war could soon be resolved, or ended.

AppLovin, which is a high-priced, fast-growing adtech company, has been hit hard by the sell-off due to its valuation and the sensitivity of the advertising industry to a recession. That volatility swings both ways, however, and helped the stock recovery today.

Additionally, the company received a bullish note from Wells Fargo, which lowered its price target on the stock from $538 to $386, reflecting the stock's recent pullback following a strong fourth-quarter earnings report, but maintained an overweight rating on the stock. Analyst Alec Bonello said that channel checks show strong trends in the first quarter, heading into the company's earnings report on May 7.

What's next for AppLovin?

In addition to the broader market sell-off, AppLovin has also been hit by three short-seller reports in the last couple of months, leading to some doubts about the high-priced stock, which skyrocketed last year.

A trade war could pressure AppLovin, but the stock has big growth plans this year. Expect the volatility to continue, though risk-tolerant investors may want to take advantage of the sell-off, as the stock is still down more than 50% from its peak less than two months ago.

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Wells Fargo is an advertising partner of Motley Fool Money. Jeremy Bowman has positions in Wells Fargo. The Motley Fool has positions in and recommends AppLovin. The Motley Fool has a disclosure policy.