In 2024, AppLovin's shares saw a substantial surge of 713% in value.
AppLovin's stock soared an impressive 712.6% in 2024, a feat that's not typically seen in large-cap companies. According to data from S&P Global Market Intelligence, the app monetization giant began the year with a market cap of around $13 billion and closed it with a valuation exceeding $100 billion.
The substantial growth can be attributed to several factors. In Q4 2023, revenue surged 36% year over year, and this trend continued in the first two quarters of 2024, rising 48% and 44% respectively. Investors were skeptical, believing the benefits from AppLovin's AI upgrade, Max 2.0, would start to wane. However, they were taken aback in November when Q3 revenue growth was reported at 39%. The continued strength of the AI tailwind sent the stock skyrocketing once again.
AppLovin's software, which recommends apps and displays ads, has been a game-changer. It recommends apps well, leading to downloads, and allows apps to host ads, creating a flywheel effect that boosts downloads and ad opportunities. The software has also unlocked massive profitability for AppLovin, increasing net income from $357 million in 2023 to three times that amount in just the first three quarters of 2024.
Looking ahead, AppLovin is aiming to expand beyond gaming apps and into other genres. It's also eyeing the connected TV app space. With a market cap of over $100 billion, AppLovin is already a significant player. While a repeat of its 2024 performance might be unlikely, further growth seems assured for this large-cap company still in growth mode.
Key factors driving AppLovin's growth include its AI-powered ad-search engine AXON, expansion into e-commerce advertising, and strategic divestment of its mobile gaming unit. The company is also planning to launch a self-serve platform and continue innovating in AI-driven ad personalization and automation. These moves, coupled with its robust operational performance and financial health, are expected to drive AppLovin's growth in 2025.
- The strong financial performance of AppLovin in 2024 attracted numerous investors, leading to a significant increase in shareholder value.
- In response to the success of Max 2.0, the AI upgrade, many investors decided to invest in Applovin's shares, anticipating the magnitude of its potential returns by 2025.
- The continuous profitability from AppLovin's software, particularly its AI-powered features, allowed the company to allocate funds for investments in expanding into new markets and product improvements.
- With its substantial financial resources and innovative strategies, Applovin's management is focused on keeping the company in growth mode, aiming for another year of growth similar to the magnitude of its 2024 performance, if not exceeding it.
