U.S.-based mobile tech company AppLovin (APP) has skyrocketed more than 700% in the past 12 months, driven by its AI-powered advertising platform. The company continued its stock market momentum with a 30% surge in after-hours trading on Wednesday, following strong Q4 results. The stock is now on the radar of both investors and analysts, even if it hasn’t made its way into their portfolios yet. With positive shifts in advertiser spending and management’s optimistic outlook, AppLovin is poised for continued growth.
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In simple terms, AppLovin offers several AI-powered products that help companies extend the reach of their advertising.
AppLovin Gears Up for Next Phase of Advertising Growth
During its earnings call, AppLovin revealed it had signed an exclusive term sheet to sell its Apps business, a strategic move driven by the fact that advertising now generates most of the company’s revenues. This highlights its transformation into a dominant player in the ad-tech space.
Notably, the company’s Advertising segment brought in almost $1 billion in revenue in Q4, marking a 73% year-over-year growth.
Overall, analysts are also bullish on AppLovin’s growth prospects, citing its innovative use of AI to drive more targeted advertising, particularly within gaming apps. Additionally, Jefferies previously stated that analysis of e-commerce advertising trends reveals a significant amount of ad spending through AppLovin, indicating a strong potential for revenue growth in the near future.
AppLovin Issues Optimistic Guidance
Looking ahead, AppLovin’s management is optimistic about continued growth in the advertising sector. For Q1 2025, the company expects revenue to range between $1.355 billion and $1.385 billion, surpassing the analyst estimate of $1.32 billion. Over $1 billion of this revenue is expected to come from its advertising segment.
As AI continues to shape the advertising landscape, AppLovin’s innovative platform positions it for dominance in the industry, potentially offering growth opportunities for investors. The company’s guidance reinforces this optimistic outlook, further solidifying its growth story.
Is AppLovin a Strong Buy?
According to TipRanks, APP stock has received a Strong Buy consensus rating based on 14 Buys and three Holds assigned in the last three months. The average price target for AppLovin is $408.41, suggesting an upside of nearly 7.4% from its current price.
