AppLovin has significantly outperformed Nvidia in stock performance since the beginning of 2023, primarily due to its rapid growth in the advertising sector. Its AI-powered Axon platform has expanded from mobile games into e-commerce and other areas, contributing to a 73% increase in Q4 advertising revenue, totaling $1 billion. Despite its lofty current valuation metrics, the company's profitability and doubling sales in key segments indicate strong future growth potential, particularly as it prepares to enter new advertising markets like Connected TV by 2025.
AppLovin has successfully outperformed Nvidia this year, demonstrating significant growth in its advertising business and potential for future expansion.
With a 73% increase in advertising revenue to $1 billion in Q4, AppLovin is transitioning to a pure-play ad tech company after selling its app business.
Despite high valuation metrics, AppLovin's nearly doubling sales in key segments suggests it may grow into its current price-to-earnings ratio in a few years.
Testing new markets like Connected TV could yield significant growth, positioning AppLovin to expand beyond its current focus on gaming and e-commerce.
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