AppLovin Corp (NASDAQ: APP) soared over 10% today, trading above $308 per share, as investor enthusiasm builds ahead of its first-quarter 2025 earnings report and on the back of strong momentum in its core business.
The rally comes after a period of volatility for the stock, which had previously pulled back from its all-time high but remains up more than 300% year-over-year, far outpacing the broader market.
The primary driver behind today’s surge is mounting optimism about AppLovin’s upcoming Q1 results, which are set to be released on May 7.
Analysts expect the company to deliver another standout quarter, projecting earnings per share of $1.45 and revenue of $1.38 billion-a 30% year-over-year revenue increase and a 116% jump in EPS from the same period last year.
These expectations are fueled by AppLovin’s successful transformation from a gaming-centric model to a pure-play AI-driven advertising technology platform. The company’s AXON 2.0 platform, which leverages artificial intelligence to optimize ad targeting and monetization, has been a key growth engine, now powering over $10 billion in annual media spend.
AppLovin’s recent strategic divestiture of its lower-margin gaming unit for $900 million has further sharpened its focus on high-margin ad tech, boosting profitability and operational efficiency.
The company’s advertising business now boasts EBITDA margins above 60%, and its ability to scale profitably in both gaming and non-gaming sectors-such as e-commerce-has attracted bullish sentiment from analysts and investors alike.
Analyst confidence remains high, with a consensus “Moderate Buy” rating and an average 12-month price target of $432.90, suggesting substantial upside from current levels. Several major firms, including Morgan Stanley and Jefferies, have recently raised their targets, citing AppLovin’s robust financial performance, margin expansion, and strong execution in the high-growth digital advertising market.
While the stock does trade at a premium valuation, reflecting high expectations, AppLovin’s history of beating earnings estimates and its leadership in AI-powered ad tech continue to justify investor optimism.
The company’s strong free cash flow, high operating margins, and successful pivot away from gaming have positioned it as one of the most compelling growth stories in the tech sector.