Billionaire Israel Englander, the legendary investor behind Millennium Management, one of the most successful hedge funds in history, has once again rewritten the playbook for investors. Despite Nvidia’s (NVDA) 400%-plus rally over the past two years, fueled by voracious demand for its AI platforms, Englander strategically pared down his exposure by offloading 1.1 million shares - a 10% reduction that still leaves Nvidia as a notable, albeit fifth, holding.
Meanwhile, he aggressively doubled down on AppLovin (APP), scooping up 808,973 shares, catapulting it into Millennium’s top 20 holdings. AppLovin’s prowess lies in its ad tech software, empowering mobile developers and CTV publishers.
With the billionaire’s interest now firmly anchored on AppLovin, let’s take a closer look at the stock’s potential.
About AppLovin Stock
Palo Alto-based AppLovin (APP), incorporated in 2011, evolved from a mobile game developer into a powerhouse in AI-driven ad tech. Its Axon platform revolutionized digital advertising, optimizing campaigns with real-time auctions and advanced analytics. With products like MAX, Adjust, and Wurl, AppLovin connects advertisers with premium inventory across mobile, CTV, and beyond.
AppLovin’s meteoric rise, fueled by its AI-driven Max 2.0 ad tech, turned a $13 billion firm as of 2023 into a $109.3 billion juggernaut. With its revenue growth, APP stock skyrocketed 2,357% in two years, surging 450% in the past 52 weeks alone.
But after hitting record highs of $525.15 in February, the stock stumbled, first as short seller Edwin Dorsey criticized its ad model, then another plunge after Fuzzy Panda and Culper Research launched a full-scale assault. Allegations of ad fraud, illicit data scraping from Meta (META), and unauthorized downloads cast a shadow over its meteoric rise.
Once the poster child of AI-powered advertising, APP now teeters under scrutiny, accused of artificially inflating sales through direct-download schemes.
APP stock is not cheap by traditional metrics – currently priced at 46.67 times forward earnings and 22.84 times sales - but its explosive growth justifies the premium.
AppLovin Beats Q4 Projections
AppLovin soared to record highs after crushing Q4 expectations, delivering a blowout earnings report on Feb. 12 after the market close. Revenue grew 44% to $1.4 billion, far outpacing Wall Street’s estimates and the company’s own 32% growth forecast. Its AI-driven ad business led the charge, with advertising revenue surging 73% to $999.5 million. EPS more than tripled to $1.73, beating estimates by 35.2%, while adjusted EBITDA soared 78%. CFO Matt Stumpf credited strong mobile gaming ad performance and early e-commerce traction during the holiday season.
In a strategic shift, AppLovin announced plans to sell its game studios for $900 million, shedding its weakest segment and sharpening focus on its high-growth ad tech business.
Meanwhile, financials remain strong, with $2.1 billion in free cash flow for 2024. As AppLovin refines its focus, its AI-driven advertising engine continues to redefine digital marketing, fueling its meteoric rise.
For the first quarter of 2025, management projects revenue between $1.355 billion and $1.385 billion, topping analyst expectations, with ad revenue anticipated to exceed $1 billion. AppLovin believes it’s still in the early stages of strengthening its AI models, which is setting the stage for further growth.
Analysts tracking AppLovin expect the company to report $1.38 billion in Q1 revenue, with EPS amounting to $1.45, a sharp 116.4% surge from the prior-year period. Looking ahead to fiscal 2025, the bottom line is anticipated to rise 51.7% year over year to $6.87 per share and rise further by 37.1% to $9.42 per share in fiscal 2026.
What Do Analysts Expect for AppLovin Stock?
Wall Street remains bullish on AppLovin, with Bank of America remaining resolute on AppLovin, reaffirming it as a top pick recently, despite short-seller turbulence. The brokerage firm underscores robust profit margins, an expanding e-commerce ad model, and explosive EBITDA growth through 2026. Viewing the stock’s dip as a buying opportunity, BofA held firm on its $580 target, expecting valuation concerns to fade. Meanwhile, AppLovin’s CEO dismissed fraud allegations, citing compliance safeguards and a Big Four audit to defend its auction process.
On Feb. 20, Loop Capital raised its price target to a Street-high $650, implying a 99.5% upside, while reiterating a “Buy” rating. Analyst Rob Sanderson sees no cracks in the bullish case, citing strong advertiser feedback and momentum. Despite concerns over rapid stock gains, he believes AppLovin’s growth is sustainable.
Overall, APP has a solid “Strong Buy” consensus rating – an upgrade from the “Moderate Buy” rating two months back, reflecting analysts’ rising bullishness on the stock. Out of the 19 analysts in coverage, 15 recommend a “Strong Buy,” and the remaining four analysts are playing it safe with a “Hold” rating.
APP’s mean price target of $501.37 suggests that it could rally as much as 53.9% from the current price levels.
