AppLovin, top tech stock of the year, soars another 45% on earnings beat
Adam Foroughi, CEO of AppLovin.
CNBC
AppLovin shares soared 45% on Thursday after the online gaming and advertising company issued guidance that was well above estimates and reported better-than-expected earnings and revenue.
The stock jumped past $245 in early afternoon trading. It’s now up 515% this year, far outpacing all other tech companies valued at $5 billion or more, according to FactSet data. The rally has lifted AppLovin’s market cap to over $80 billion.
Revenue in the third quarter climbed 39% to $1.2 billion, topping the $1.13 billion average estimate, according to LSEG. Earnings per share of $1.25 exceeded the 92-cent average estimate.
For the fourth quarter, AppLovin sees revenue of $1.24 billion to $1.26 billion, representing growth of about 31% at the middle of the range. Analysts were expecting about $1.18 billion.
Founded 12 years ago, AppLovin went public in 2021, riding a Covid-era wave of excitement in online games. Now, the company’s games unit generates relatively slow growth, but its online ad business is bustling from advancements in artificial intelligence that have improved ad targeting.
AppLovin attributes much of its growth to its AI advertising engine called AXON, particularly since releasing the updated 2.0 version last year. The technology helps put more targeted ads on the mobile gaming apps the company owns, and it works for other studios that license the software.
The company said software platform revenue in the quarter increased 66% to $835 million, driven by improvements in AXON’s models.
“As we continue to improve our models our advertising partners are able to successfully spend at a greater scale,” the company said in a letter to shareholders.
While revenue is increasing at a rapid rate, Wall Street is most attracted to AppLovin’s profitability. Net income in the quarter increased 300% to $434.4 million, or $1.25 a share, from $108.6 million, or 30 cents a share, a year earlier. The software platform had an adjusted profit margin of 78%.
“AppLovin continues to impress with outsized revenue growth and incredible EBITDA conversion,” analysts at Wedbush wrote in a report on Thursday. They recommend buying the stock and increased their price target from $170 to $270.
AppLovin CEO Adam Foroughi, whose net worth swelled on Thursday by more than $2 billion to about $7.4 billion, provided an update on the company’s pilot e-commerce project. The technology allows businesses to offer targeted ads in games.
“In all my years, It’s the best product I’ve ever seen released by us, fastest growing, but it’s still in pilot,” Foroughi said on the earnings call. E-commerce “is looking so strong that it’s something that we think will be impactful to the business financially in 2025 and then for the long-term.”
— CNBC’s CJ Haddad contributed to this report
WATCH: AppLovin is ‘killing Unity’
People walk next to the Google Cloud logo, during the 2025 Mobile World Congress (MWC) in Barcelona, Spain, March 4, 2025.
Albert Gea | Reuters
Google Cloud announced Thursday a multi-year partnership with artificial intelligence coding startup Replit, giving the search giant fresh firepower against the coding products of rivals, including Anthropic and Cursor.
Under the partnership, Replit will expand usage of Google Cloud services, add more of Google’s models onto its platform, and support AI coding use cases for enterprise customers.
Google will continue to be Replit’s primary cloud provider.
Replit, founded nearly a decade ago, is a leader in the fast-growing AI vibe-coding space.
In September, the startup closed a $250 million funding round that almost tripled its valuation to $3 billion, and said it grew annualized revenue from $2.8 million to $150 million in less than a year.
And new data from Ramp, a fintech company that also tracks enterprise spending on its platform, found that Replit had the fastest new customer growth among software vendors. Google, meanwhile, is adding new customers and spending faster than any other company on Ramp’s platform.
Put those together, and you get a clearer picture of why both companies see opportunity.
Vibe-coding emerged as a phenomenon earlier this year after AI models became more adept at generating code using only natural language prompts, allowing users with little experience in programming to use AI to create functioning code and potentially full applications.
Anthropic announced on Tuesday that its product Claude Code hit $1 billion in run-rate revenue. The coding startup Cursor, in November, closed a funding round that valued it at $29.3 billion, while also announcing it reached $1 billion in annualized revenue.
Replit, which bills itself as an easy-to-use product for non-developers, could help drive Google Cloud adoption among enterprises, and expand the reach of its AI efforts beyond traditional engineers.
Google is riding on the momentum of its new top-scoring model, Gemini 3. Shares of Alphabet have risen more than 12% since its debut.
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