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AppLovin (NASDAQ:APP) just delivered another knockout quarter, sending its stock soaring over 20% at 2.24pm today. The AI-powered ad tech giant crushed expectations with Q4 revenue up 44% to $1.37 billion, while earnings per share skyrocketed to $1.73blowing past Wall Street's $1.25 estimate. Advertising revenue surged 73% year-over-year, fueling an 85% jump in advertising EBITDA. CEO Adam Foroughi emphasized that the company is still in the early days of optimizing its AI-driven ad models, positioning AppLovin to capture an even bigger slice of the $15 billion mobile gaming ad market.
Investors took notice as AppLovin raised its Q1 2025 revenue guidance to a range of $1.36 billion to $1.39 billion, outpacing analyst expectations. The company's AI engine, Axon, is proving to be a game-changer, helping drive profitability and market share gains. Net income soared 248% year-over-year to $599 million, while free cash flow for 2024 hit a massive $2.1 billion. Management isn't sitting still eitherAppLovin aggressively repurchased shares, a signal of confidence in its future. Wedbush analyst Michael Pachter hiked his price target to $545, more than doubling his prior outlook, citing the company's dominant growth trajectory.
Since going public at $80 in 2021, AppLovin's stock has been on an absolute tear, now trading north of $500. Its AI-driven ad ecosystem is proving to be a relentless money-making machine, outpacing expectations every quarter. As digital ad spending heats up, AppLovin's momentum isn't slowing down. With AI-powered advertising reshaping the industry, this stock's rise might just be getting started.
This article first appeared on GuruFocus.