"AppLovin ( APP) is quietly building an ad behemoth that could step on Amazon's ( AMZN) turf. Once primarily known as a mobile game publisher, AppLovin has transitioned into a pure-play software and AI-driven ad tech company. It now acts as an infrastructure layer, connecting thousands of advertisers with mobile app publishers to sell ad space in real time. "AppLovin should definitely be able to compete with DSPs [demand side platforms] like Amazon outside of the walled gardens if their AXON machine learning advertising engine continues to successfully onboard non-gaming advertisers," Morningstar analyst Mark Giarelli told Yahoo Finance."
"That engine, AXON 2.0, is the proprietary AI brain of the company. It uses massive datasets from mobile users to calculate which consumer is most likely to click buy for a specific product. Giarelli's bullishness on AppLovin is backed by a fiscal profile that makes even household AI names look sluggish. In a research note, Giarelli points to AppLovin's Rule-of-40 score (a gold-standard metric combining revenue growth and operating margin), which recently clocked in at 151%."
AppLovin transitioned from a mobile game publisher into a software- and AI-driven advertising technology infrastructure that connects advertisers and mobile app publishers in real time. The proprietary AXON 2.0 machine-learning engine analyzes massive mobile-user datasets to predict which consumers are most likely to click and buy specific products. Financial metrics indicate strong efficiency, with a Rule-of-40 score reported at 151%, outpacing several well-known AI companies. Stock performance has risen about 50% over the past year. Forecasts project total 2026 revenue near $9.3 billion, with substantial e-commerce net revenue and growing merchant ad spend.
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