AppLovin Corporation APPis an artificial intelligence-boosted tech stock that outclimbed Nvidia and other Wall Street darlings over the last three years, soaring 880%.
APP posted another impressive beat-and-raise quarter on May 7 as the digital app monetization powerhouse flexes its growth as customers flock to its offerings to get ahead in a cut-throat segment of the digital economy.
The company and the stock have also fought back against multiple short-seller reports that came out earlier this year.
AppLovin is firmly on the risk end of the asset pool, with the valuation to prove it.
Wall Street has jumped headfirst back into all things growth from AI to nuclear energy upstarts, making AppLovin an enticing buy down 30% from its all-time highs and 20% below its average Zacks price target. The tech stock could break out once it retakes a key technical level.
AppLovin is projected to post impressive double-digit earnings and revenue growth in 2025 and 2026 as it expands its reach beyond mobile gaming into media, finance, and more.
Is this AI-Powered Software Company the Next Tech Giant?
AppLovin’s diverse product lineup provides essential tools for clients striving to thrive in the increasingly competitive digital app economy.
The Palo Alto-based firm's AI-powered software solutions help its clients reach their target users “in-app, on mobile devices, across streaming TV, and beyond” to try to help them tap into a portion of “1.4 billion daily active users.”
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AppLovin’s technology helps its clients in mobile gaming and beyond boost user acquisition, enhance engagement, and maximize customer value throughout the customer lifecycle. The firm’s solutions were originally tailored toward mobile app developers in the gaming realm.
AppLovin has transformed its business to expand far beyond gaming into finance, fitness, health, shopping, sports betting, and nearly any industry that might be attempting to monetize digital apps. The goal is to become a one-stop ad platform for all direct-to-consumer businesses in the digital economy.
AppLovin almost doubled its sales (+93%) in 2021. Following that standout year, growth slowed to 1% in 2022 as the digital ad market slumped, dragging down Meta and others.
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APP launched its advanced machine learning and AI-driven AXON technology in the second quarter of 2023. That year, AppLovin grew its revenue by 17% and swung from a loss of -$0.52 to a profit of +$0.98 per share. The company followed up with 43% sales growth in 2024 and 362% EPS growth.
The Ad Tech Company’s Growth Outlook and Profit Focus
The app monetization company is concentrating on five key growth pillars in 2025. One of APP’s goals is to personalize ad experiences with AI to create “countless iterations and dynamically select personalized creatives for each user” to help boost engagement and response rates.
Personalized ads represent the next frontier in the ad industry, shifting from the current “static” experience, where “users see similar-looking advertisements created by humans,” to a more dynamic, tailored approach.
AppLovin is also critically focused on streamlining its operations to improve efficiency and the bottom line. CEO Adam Foroughi said the firm aims to reduce headcount while seizing growth opportunities.
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Underpinning these efforts is a focus on AI-driven automation and personalization. APP grew its Q1 revenue by 40% and its adjusted earnings by 150%, topping our estimate by 15%. The company’s strong guidance, which came in the face of short-seller reports, pushed its EPS estimates even higher.
APP’s Q2 earnings estimate has jumped 29% in the last few months, with its 2026 estimate 26% higher, helping it earn a Zacks Rank #1 (Strong Buy). The company’s EPS outlook has gone straight up over the last year and a half.
APP is projected to grow its revenue by 23% in 2025 and 21% in 2026 to surge from $4.71 billion in FY24 to $7 billion in FY26.
Meanwhile, it is projected to grow its earnings by 85% and 42%, respectively, following 362% bottom-line expansion in 2024. This trajectory would lift AppLovin’s EPS from $4.53 last year to $11.91 in FY26.
APP Short Seller Update
AppLovin faced significant scrutiny from multiple short-seller reports that challenged the integrity of its AI-powered advertising platform and business practices. Fuzzy Panda Research and others released short seller reports between February and March.
Overall, the short sellers claimed that AppLovin’s revenue is low-quality and driven by deceptive, predatory, and other potentially illegal advertising practices.
APP has fought against all the allegations and is “fully committed to defending the Company, its operations, and its reputation from those seeking to manipulate the market through false narratives.”
It hired a legal team at the end of March, retaining “Alex Spiro of Quinn Emanuel Urquhart & Sullivan, a nationally recognized legal firm with deep expertise in securities and corporate investigations, to conduct an independent review and investigation into recent short report activity.”
AppLovin announced on May 7, when it reported earnings, that it sold its mobile gaming segment to Tripledot Studios for $400 million plus a 20% stake in Tripledot. The deal helps APP focus on its higher-margin ad tech platform and streamline operations amid short-seller scrutiny and strategic reprioritization.
Investors must ask themselves a simple question: if Wall Street thought these allegations had legs, why is the stock in the green in 2025 and up over 450% since it went public?
AppLovin: Buy This Growth Tech Stock Now, or Wait?
AppLovin stock skyrocketed 1,500% over the past two years after a steep drop in 2022 alongside the broader market. APP’s two-year surge blows away Nvidia’s NVDA 360% and Meta’s META 170%. The stock has climbed 460% since its April 2021 IPO against Tech’s 40% and Meta’s 100%.
APP is up 12% in 2025 after its recent rally. Yet, the stock trades 30% below its all-time highs and 20% below its average Zacks price target.
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If APP breaks above the trendline highlighted above (its December highs, Q4 earnings gap up, and pre-selloff levels), it could skyrocket to new records.
That said, AppLovin is overheated on the RSI level front, and it might fall to its 50-day or 200-day moving averages if selling pressure takes over following the huge market rally. Any pullback to those levels could mark a great buying opportunity for investors and traders.
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Valuation-wise, AppLovin stock trades at a 90% discount to its all-time highs and 50% below its recent highs at 41.8X forward 12-month earnings (Tech trades at 25.5X). If you factor in AppLovin’s huge earnings growth outlook, it trades much closer to the Tech sector’s 1.7 Price/Earnings-to-Growth (PEG) ratio at 2.1.
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