AppLovin surges as BofA says 'multi-year growth story' is happening
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AppLovin (NASDAQ:APP) shares surged more than 25% in pre-market trading on Thursday on the back of second-quarter results, with investment firm Bank of America noting that a "multi-year growth story" is starting to happen.
"Axon 2.0 has the potential to catalyze a multi-year growth story, whereby AppDiscovery penetrates non-gaming verticals, and Wurl (CTV inventory), takes off," analyst Omar Dessouky wrote in an investor note.
Dessouky added that while the risk of Apple (AAPL) making a demand-side platform "looms distantly," he reiterated his buy rating on "positive risk-reward." Dessouky also upped his price target to $41 from $35 following the results. 
During the second-quarter, AppLovin (APP) saw revenue slip 3% year-over-year to $750M, though the company's software platform business had a record period, up 14% year-over-year to $406M.
Dessouky pointed out that he believes guidance from management is still "cautious." He is expecting a higher step-up sequentially due to a full quarter of Axon 2.0 deployment, self-improvement as Axon collects data and engineering enhancements. 
Looking ahead, AppLovin (APP) expects third-quarter revenue to fall within a range of $780M to $800M, above the estimate of $741.72M. It also expects adjusted EBITDA to be within a range of $340M to $360M.
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