By Nate Wolf
A new artificial-intelligence project at Google could disrupt how videogames are made. But AppLovin's role in the mobile-gaming ecosystem remains intact, according to Benchmark Equity Research.
The firm pushed back on fears that Google DeepMind's Project Genie could threaten AppLovin in a research note Monday, reiterating a Buy rating on the stock and a $775 price target.
Shares were up 7.4% to $507.94 in premarket trading Monday. AppLovin fell 17% on Friday, as investors fled gaming stocks -- including Unity Software and Roblox -- in response to Google's announcement that Project Genie was available for Google AI Ultra subscribers in the U.S.
Project Genie is an AI-driven platform that allows users to create gameplay worlds from text and images without relying on a traditional game engine. While the tool is currently a research prototype, it signals where game development is trending.
"Over time, such tools could materially lower the cost, skill, and time required to create interactive content," wrote Benchmark analyst Mike Hickey.
That would have been a problem for AppLovin a year ago, before the company sold off its mobile-gaming business. Today, its core game advertising and monetization business could, if anything, benefit from a shakeup in game development.
Benchmark believes developers will eventually package Genie-created experiences as standalone games and distribute them through Android and iOS, rather than keeping them within Alphabet's ecosystem.
"AI-native creation changes how games are built, but not how they are discovered, acquired, or monetized," Hickey wrote. "AppLovin's exposure sits squarely at the monetization and discovery layer rather than content creation."
Advertisers wouldn't be entirely immune from advancements in AI-driven game development. Lower development costs could mean shorter game lifecycles and faster player churn, Benchmark conceded, potentially reducing user-acquisition spending for individual games.
This change wouldn't necessarily lower aggregate ad dollars, though. In fact, if games become easier for developers to ship, downstream effects like greater experimentation and competition could ultimately help AppLovin.
"Historically, such fragmentation benefits performance advertising platforms, as advertisers rely more heavily on automated acquisition, creative optimization, and bidding tools to stand out," Hickey said.
Write to Nate Wolf at nate.wolf@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 02, 2026 10:00 ET (15:00 GMT)
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