Wed Nov 06 15:04:44 UTC 2024: ## AppLovin Soars 310% in 2024, Outperforming Even Nvidia’s AI Boom

**SAN FRANCISCO -** While Nvidia’s AI-fueled surge has dominated tech headlines, a digital advertising company with a focus on gaming, AppLovin, has quietly outpaced even the AI chipmaker’s impressive performance.

AppLovin’s stock has skyrocketed 310% in 2024, making it the top performer among U.S. tech companies with a market cap exceeding $5 billion, according to FactSet data. This surpasses even Nvidia, which has risen 173% this year, leading the AI boom and becoming the world’s second-most valuable public company.

Founded in 2011, AppLovin went public in 2021, riding the wave of online gaming popularity during the pandemic. While its games unit continues to grow, it’s the company’s online ad business that’s truly booming, benefiting from AI advancements that have improved ad targeting.

This Wednesday, investors will be closely watching AppLovin’s earnings report, eager for proof that the company’s rally is justified. Analysts are expecting revenue growth of 31% to $1.13 billion, according to LSEG, following two consecutive quarters with growth exceeding 40%.

Beyond revenue, AppLovin has shown a significant jump in profitability. LSEG’s consensus forecasts EPS to more than triple to 92 cents, with analysts anticipating operating income to more than double to $424.2 million, according to FactSet.

The company attributes much of its growth to its AI advertising engine, AXON, particularly since releasing the updated 2.0 version last year. AXON helps deliver targeted ads on AppLovin’s owned mobile gaming apps and is licensed by other studios.

Analysts are increasingly bullish about AppLovin’s prospects. Wells Fargo initiated coverage with a buy rating, while BTIG raised its price target to $202, the highest among firms tracked by FactSet. Oppenheimer, Stifel Nicolaus, and Jefferies also increased their targets in October.

Wedbush analysts believe the ad opportunity in the mobile gaming industry will grow from $10 billion today to $50 billion over the next decade. They see AppLovin well-positioned to capture a significant share of this growth by attracting brand advertising from conventional channels like social media and broadcasting.

However, AppLovin faces competition from tech giants like Google, Amazon, and Facebook. The company also relies heavily on mobile platforms from Apple and Google for distribution.

The company’s founder and CEO, Adam Foroughi, has seen his stake in AppLovin soar to approximately $5 billion in value.

AppLovin’s journey has been marked by both near-misses and strategic triumphs. A 2016 deal to sell a majority stake to Chinese investment firm Orient Hontai Capital fell through due to U.S. government scrutiny of Chinese involvement in the domestic tech sector. In 2022, AppLovin abandoned a $20 billion bid to acquire gaming software developer Unity Software after shareholders rejected the offer. Unity has since struggled, while AppLovin’s market cap has multiplied sixfold.

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