$Applovin (APP.US)$ The Earnings Reports will be released after market close on February 12, Eastern Time. According to the latest predictions by Analysts, Applovin is expected to achieve revenue of $1.264 billion in Q4 2024, an increase of 32.58% year-on-year; the expected EPS is $1.26, an increase of 156.71% year-on-year.

As the 'new favorite of AI' on Wall Street, Applovin saw a remarkable cumulative increase of 712% last year, becoming the best-performing Technology stock in 2024. The upward trend continues this year, with an impressive increase of nearly 18% year-to-date, and the latest Market Cap has soared to $127.7 billion.$Starbucks (SBUX.US)$、$Micron Technology (MU.US)$and $Intel (INTC.US)$ Such well-known companies.

Looking back at the last quarter, Applovin announced strong quarterly results, with an EPS of 1.25 dollars in Q3, easily surpassing Wall Street's general expectations, while revenue was nearly 1.2 billion dollars, a significant quarter-on-quarter increase of 39%. Notably, following the performance that greatly exceeded expectations and driven by the AI boom, the stock soared 46% on the day after the earnings report.

Looking ahead to this performance, investors remain focused on the two core businesses of Software and applications. From the previous quarter’s results, the revenue from software platforms accounted for as much as 70% of total revenue. In addition, the growth momentum of AI-driven advertising engine optimization and the potential market size are also key points for Applovin's future development.

Specifically, according to Bloomberg Consensus expectations, in the fourth quarter, Applovin's Software platform revenue is expected to be $0.89 billion, a year-on-year increase of 54.73% and a quarter-on-quarter increase of 6.8%; revenue from applications is expected to be $0.37 billion, a year-on-year decrease of 1.85% and a slight quarter-on-quarter increase of 1.9%.

The heat of AI Advertising Marketing continues, Applovin is the first to experience the 'sweetness'.

In recent years, AI technology has seen explosive growth, and the Advertising Marketing industry, as one of the first to embrace AI transformation, has allowed Applovin to be among the first companies to reap the benefits.

According to the data, Applovin is an online application gaming and advertising technology company that profits through e-commerce advertising via mobile applications and game platforms. Specifically, Applovin's software platform is supported by Applovin's AI-based recommendation engine AXON, enabling advertisers to automate their marketing, interaction, and monetization efforts.

Taking AppDiscovery as an example (which accounts for a significant portion of Applovin's revenue). AppDiscovery is powered by Axon's predictive algorithms, enabling advertisers to match their apps with users who are more likely to download them.

This form of personalized advertising focuses on the end user, allowing advertisers to find the right users and offer more content that they might be interested in. Advertisers can attract users who download the apps, as well as find a large number of users who continue to use their apps for higher retention rates, ultimately leading to better profit opportunities.

Cinda Securities believes that Applovin's continued outperformance indicates the effectiveness of its marketing business model powered by the AI recommendation engine AXON, where advertisers are willing to pay higher prices for better advertising results, and the company's revenue can cover the costs associated with the computing power invested in AI.

AI-optimized marketing deployment has been validated to be effective, regardless of whether it is for large media like. $Meta Platforms (META.US)$ 、 $Alphabet-C (GOOG.US)$ Mediums like Applovin are expected to continue driving the development of AI marketing.

China Securities indicated that the business model of AI applications has been certified, with revenue covering token costs being a prerequisite for the industry to invest, as well as a prerequisite for the prosperity of AI applications. Hardware companies are accelerating the landing of AI models and applications, and the emergence of these applications is expected to bring new demand for hardware. With the improvements in card performance, inference optimization, and model optimization, inference costs are expected to be significantly reduced, creating conditions for various forms of AI applications to emerge gradually.

Institutions are collectively bullish before earnings.

Although $Applovin (APP.US)$The valuation has reached a high level, but some Analysts who are bullish on Applovin's stock price still consider the company a Buy. Jefferies Financial has rated it as the "Best Investment" for 2025, raising the Target Price to $425.

Loop Capital analysts believe Applovin will again be one of the better-performing growth stocks in 2025, raising their Target Price from $385 to $450. The firm noted that Applovin's core gaming business has grown significantly, with a three-year compound annual growth rate of 63%, proving that its stock price is reasonable. In addition to gaming, Loop believes that direct-to-consumer advertising can also bring rapid revenue growth. Loop also believes that Applovin has been included. $S&P 500 Index (.SPX.US)$ The listing is just a matter of time, as its Market Cap has already exceeded $100 billion.

How did the stock price perform on earnings report days?

Currently, the implied volatility of Applovin is ±19.1%, indicating that the options market is betting on a daily price change of 19.1% after earnings; in comparison, the average price change of Applovin in the past four quarters after earnings was ±14.8%, showing that the current option value for the stock is overvalued.

From the perspective of options volatility skew, market sentiment is slightly bullish on Applovin's future performance.

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Editor/rice