AppLovin shares rose 2.74% after UBS upgraded the software maker to a Buy rating, citing increased revenue growth visibility.

Analyst Chris Kuntarich highlighted in a note that the market has yet to fully recognize the durability of AppLovin's revenue growth. The company's improved advertising return compared to competing channels, which is "rarely seen," could drive software revenue growth of 20%-30%, particularly from its gaming segment.

Kuntarich also noted that the company's current valuation is "supportive" of this outlook.