Shares of digital advertising specialist AppLovin (APP -0.44%) certainly got the new trading week started on the right foot, soaring 15.1% as of 12:40 p.m. ET Monday. And, more of the same could be in the cards.
Just don't dig in too deep if you're planning on digging in at all. This always-volatile meme stock could still just as easily start tumbling again.
Bullish whispers
Investment bank Jefferies' analyst James Heaney is being given most of the credit for today's move. Multiple reports are circulating this morning that he reiterated the firm's per-share price target of $860 -- nearly 90% above the ticker's current price -- while calling the stock's 45% pullback from December's high a "great buying opportunity." Although this reiteration isn't yet directly confirmed, it is plausible, as this price target and bullish opinion was Jefferies' last-known verified stance.
NASDAQ: APP
Key Data Points
It's not just Jefferies though.
While not a conventional research and analysis organization in the same vein as Jefferies, last week, independent investigative journalism entity CapitalWatch corrected and apologized for a damning but misguided money-laundering accusation of one of AppLovin's key shareholders, potentially reversing any selling the initial report may have spurred. Also last week, a well-followed independent investment analyst argued that the competition-driven worries dragging APP shares down this year aren't merited. The analyst instead believes the company will actually be able to use these new digital advertising tools -- offered by Alphabet and CloudX -- to its own advantage.
While both of these updates surfaced last week, the bearish market environment at the time may have obscured them. They may have only begun to get attention and circulate in earnest this week specifically because the reported reiteration from Jefferies put them into focus.
Just understand what AppLovin stock really is here
Take all of it with a grain of salt, of course. Again, as of the latest look, Jefferies' reiterated price target and Heaney's suggestion that the recent dip is a buying opportunity have not yet been confirmed by Jefferies or reported by a traditional news source. At the same time, it can be difficult to ferret out what's credible and what isn't from independent and/or unverified sources (potentially forcing a correction like the one issued by CapitalWatch), some of whom may have a vested interest in a stock's performance.
Image source: Getty Images.
Nevertheless, these are factors impacting APP stock's price today.
The question is, does Monday's jump mark the beginning of a prolonged recovery?
The only good answer is... maybe. The chief challenge to making any call here is simply that meme stocks like this one are subject to the constant push-pull of such headlines. It's not an investment. It's still mostly just a speculative trade, reflecting a prediction of how the market's opinion of APP stock is apt to change in the foreseeable future.
