Applovin Soars 8.08% on AI Revenue Surge, Gaming Exit

On May 12, 2025, Applovin's stock rose by 8.08% in pre-market trading, reflecting strong investor confidence in the company's recent financial performance and strategic moves.

Applovin recently reported its financial results for the quarter ending March 31, 2025, highlighting a 71% year-over-year increase in advertising revenue and a 14% decline in application revenue. This performance underscores the company's strategic shift towards a "go-to-broad" approach, focusing on its core strengths in advertising technology.

In a significant move, Applovin announced the sale of its entire mobile gaming business to Tripledot Studios for a total value of $8 billion. This transaction allows Applovin to transition from a hybrid gaming and advertising platform to a pure SaaS-based advertising technology company, focusing on scalable and high-margin advertising revenue.

Despite facing multiple short-seller reports from Culper Research, Fuzzy Panda Research, and Muddy Waters, Applovin's CEO Adam Foroughi defended the company's practices, emphasizing the complexity and innovation of their AI-driven advertising technology. Foroughi highlighted that Applovin's Pixel function complies with industry standards and that their Axon product is built through advanced engineering, not shortcuts.

Applovin's strategic pivot towards AI-driven advertising technology is expected to drive future growth. The company's AI platform, Axon, has shown significant potential, with a 71% year-over-year increase in advertising revenue driven by AI optimization. This technology is poised to expand into new areas, including e-commerce, further diversifying Applovin's revenue streams.