Shares of software company AppLovin (NASDAQ: APP) surged in after hours on Wednesday when the company announced strong Q4 earnings. After gaining 1.35% on the day, the stock jumped 19.37% in the first 30 minutes after the close then reached 30% when the market opened on Thursday. Year-to-date, the stock is up 50% and has risen an astounding 538% over the past six months. The company, which is leveraged to AI, announced EPS of $1.73, well ahead of Wall Street’s forecast for $1.25 and a huge leap from last year’s 49 cents per share. Q4 revenue was $1.37 billion, exceeding estimates of $1.26 billion and an increase of $953 million from the prior year’s final quarter.
Now, these kinds of moves are typically reserved for the fastest-growing companies, or those with tiny market capitalizations that have come across key catalysts. In the case of AppLovin, there are certainly catalysts worth considering, and I’ll get to those shortly. But this is also a company that’s benefiting from strong secular growth trends investors are looking for increased exposure to. As investors continue to pile into such stocks, retail investors appear to be looking to gain outsized exposure ahead of a continued boom.
Of course, as is the case with many momentum-driven rallies, the question is whether this near-term momentum can be sustained. And it’s worth considering that AppLovin did see a more than 90% drawdown from its post-pandemic levels in 2021 in the past. So, is this stock headed for another beat down, or is this momentum real?
Let’s dive into some catalysts and price predictions around where this stock could be headed in 2025 through to the end of this decade.
Key Points About This Article:
- AppLovin has seen incredibly strong growth, driven by its core business model which helps online advertisers boost monetization and marketing efforts for their solutions.
- Here’s where this stock has come since its inception, and where AppLovin could be headed over the next one to six years.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
3 Key Drivers for AppLovin
Theres plenty on the news front investors in AppLovin have to contend with. For one, the analysts covering AppLovin have not been as bullish on this company as many may think, having issued warnings on the stock last year due to concerns around the company’s fundamentals.
We see these key drivers propelling AppLovin further this year.
1. AI-Powered Advertising Enhancements-
AppLovin’s Axon AI engine has been a game-changer, optimizing ad targeting and expanding beyond gaming into new categories like e-commerce, fintech, and automotive advertising. During the Q4 2024 earnings call, CEO Adam Foroughi highlighted that for the first time, AppLovin captured a significant share of holiday shopping ad spend—validating that its AI models are effective outside gaming.
- Scaling AI Beyond Gaming: The company initially focused on direct-to-consumer (DTC) brands, but early pilots have shown AI-driven success across multiple verticals. This means any business in any industry could potentially tap into AppLovin’s advertising platform.
- Personalized Advertising With Generative AI: The company is developing automated tools and AI-generated ad creatives to improve engagement. AppLovin’s self-service platform (currently in progress) will eventually allow businesses to run ads autonomously with AI-optimized targeting—a major step toward scaling its reach.
AppLovin’s AI capabilities are proving to be industry-agnostic, opening the door for millions of global advertisers.
2. Expansion Into E-Commerce Advertising
Foroughi described Q4 2024 as a major milestone, marking AppLovin’s first real penetration into e-commerce advertising. Historically, the company primarily monetized mobile gaming ads, but now retail and consumer brands are joining the platform in large numbers.
- Surging Demand From E-Commerce Brands: Advertisers saw strong return on investment during the holiday season, prompting continued demand for the platform in 2025.
- Pilot Program Scaling Up: While AppLovin hasn’t disclosed the number of e-commerce advertisers, industry checks suggest a significant influx of brands wanting access.
- Self-Service Expansion Is the Next Big Growth Driver: Currently, the company manually onboards advertisers, but in 2025, the launch of automated tools and a self-serve platform will allow thousands of new businesses to join.
E-commerce advertising is set to be a major revenue contributor and once self-serve tools are operational, adoption could scale exponentially.
3. Strategic Divestment of Mobile Gaming Unit
AppLovin is officially exiting game development—a move that frees up resources to focus entirely on advertising technology.
- $900 Million Sale of Apps Business: AppLovin announced that it has signed an exclusive term sheet to sell its mobile gaming division, with $500 million in cash and $400 million in equity in a private company.
- Why This Matters: The company originally acquired gaming studios to train its AI models, but it was never meant to be a core business. Now that AI is self-sufficient, AppLovin no longer needs to develop its own games.
- Shifting to a Pure Ad-Tech Model: With gaming divested, the company can fully concentrate on expanding its advertising ecosystem—positioning itself as a direct competitor to Google and Meta in the ad tech space.
Divesting from mobile games is a giant pivot for the stock, as it paves the way as a pure advertising technology company.
AppLovin Stock Price Prediction 2025-2030
AppLovin (APP) Stock Price Prediction for 2025
It’s clear that there are strong reasons behind why AppLovin is up as much as it is this year. Simply put, investors are now banking on AppLovin as a potential AI beneficiary, as a number of AI advancements have fueled customer success and accelerated the company’s adoption and growth rates across the board. If the company can continue to prioritize generating outsized free cash flow and return capital to shareholders to a greater degree, I certainly think this multiple could be warranted. Here’s where APP stock could be headed, assuming the company’s multiple stays the same and earnings grow according to analyst estimates.
The current consensus one-year price target for AppLovin is $423.19. Of all the analysts covering AppLovin, the stock receives a “Strong Buy” rating.
24/7 Wall Street‘s 12-month forecast projects AppLovin’s stock price to be $430.00. We see APP continuing its strong growth rate and outperforming analysts’ expectations.
AppLovin Price Target for 2030
We estimate AppLovin’s stock price to be $717.00 per share with a sub 10% year-over-year revenue growth. Our estimated stock price will be 62.47% higher than the current stock price of $441.30.
| Year | Price Target |
| 2025 | $505.00 |
| 2026 | $530.00 |
| 2027 | $637.00 |
| 2028 | $710.00 |
| 2029 | $975.00 |
| 2030 | $1325.00 |
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