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Sitting at a market cap of $126.5 billion, AppLovin Corporation (APP) has seen significant growth in the mobile technology and advertising sectors.
Founded in 2012, the company uses artificial intelligence (AI) to improve mobile app marketing and monetization. In 2024, AppLovin’s stock price surged by an astounding 735%, wildly outperforming the broader market. This upward trend continued in 2025, with shares reaching an all-time high of $525.15 after the company reported a strong quarter and a robust end to 2024. The company’s AI-powered advertising solutions have contributed significantly to its success.
However, shares have pulled back dramatically from those all-time highs. The stock is now up just 2.6% in the year to date. But Wall Street believes the stock can rise as much as 108% from current levels. Let’s find out if now is a good time to buy this exceptional stock.
AppLovin Reported Astounding Growth in 2024
AppLovin has two business segments: software offerings and apps. The software platform provides developers with AI-driven marketing software and tools for marketing and monetizing their apps, while the apps segment offers a variety of free-to-play mobile games. The company’s suite of solutions includes AppDiscovery, Adjust, Wurl, MAX, and SparkLabs, among others.
AppLovin’s AI-powered platform, particularly advancements in Axon technology, has played an important role in the company’s growth. In the fourth quarter, the company’s total revenue increased by 44% year on year to $1.37 billion. The company renamed its software platform segment to advertising revenue, which grew by 73% to $999.5 million in the quarter. Advertising revenue increased 75% year-over-year to $3.2 billion for the full year. Apps revenue fell 1% in the fourth quarter but increased 3% for the year.
For the full year 2024, AppLovin’s revenue stood at $4.71 billion, a 43% increase from 2023. Adjusted earnings for 2024 came in at $1.58 billion, reflecting a substantial 343% surge.
Challenges Are Rising, But AppLovin Is Ambitious
Despite its impressive growth, AppLovin has recently encountered some challenges. Recent reports from the Bear Cave newsletter have raised concerns about the quality of its advertising practices, implying the use of misleading advertisements. According to the newsletter, AppLovin’s rapid stock rise last year was driven by “low-quality revenue growth from ads that are deceptive, predatory, and, at times, unreadable or unclickable.”
AppLovin hasn’t commented on it. In fact, management is ambitious and has outlined a strategy for 2025 to further solidify the company’s leadership in AI-driven advertising. The company intends to refine and improve its advertising AI models so that it can dynamically generate and personalize ad creatives at scale.
Furthermore, AppLovin intends to launch a self-service dashboard powered by AI agents, allowing advertisers to manage their campaigns more efficiently and easily, avoiding the need for manual intervention. Besides gaming and e-commerce, it also intends to broaden its reach to more businesses in the digital economy. In 2024, the company generated $2.1 billion in free cash flow and ended the year with $741.4 million in cash and cash equivalents, which should help fund its expansion plans. AppLovin’s jump from a small startup to a market leader in mobile advertising shows the transformative power of AI and strategic innovation. While challenges persist, the company’s strong financial performance, strategic diversification, and AI-driven innovations position it for long-term growth.
Analysts covering AppLovin anticipate rapid growth over the next two years. Analysts predict that revenue and earnings will increase by 23.1% and 44.7% in 2025, respectively, with another 20.8% increase in revenue and 48% in earnings growth expected in 2026.
AppLovin stock is currently trading at 62 times forward 2025 earnings, which is a high multiple. While this is an excellent growth stock to buy right now, investors may want to wait until the stock is a more reasonable buy.
Is AppLovin Stock a Buy on Wall Street?
Despite the concerns, Wall Street’s optimistic outlook on APP stock remains unchanged. It is still considered a “Strong Buy.” Analysts at Citi, Loop Capital, and Benchmark Equity Research raised their price targets for APP stock after being impressed with the strength of its AI-powered ad platform and ambitious plans for 2025. Out of the 19 analysts who cover the stock, 15 rate it as a “Strong Buy,” while four rate it as a “Hold.” The average target price of $501.37 suggests a 61% increase from current levels. Furthermore, the high price estimate of $650 implies that the stock could rally by up to 108% over the next 12 months.
