Hong Kong stock concept tracking | AppLovin's stock price surged with the help of advertising tool AI function, AI monetization efficiency improved, scene expanded (with concept stocks)

Driven by better-than-expected performance in Q3 2024 and the expectation of AI empowerment, the stock price of the US-listed company AppLovin surged by 72% to $290 in the last two trading days last week, with the market value momentarily surpassing the trillion-dollar mark. The stock has seen a cumulative increase of 627% since the beginning of the year, far surpassing Nvidia's 206% increase for the same period. AppLovin's quarterly report released on November 7, 2024, showed a revenue of $1.198 billion, a 39% year-on-year increase, exceeding market expectations by 5.9%; a net profit of $434 million, a 300% year-on-year increase, with a net profit margin of 36%; and an adjusted EBITDA of $722 million, surpassing market expectations by 12.4%, with an EBITDA profit margin increase of 11.7 pp. to 60%. The software platform revenue increased to $835 million, a 66% year-on-year increase, with an adjusted profit margin of 78% for the software platform. AppLovin attributes its success to the AXON 2.0 AI-driven technology used on its AppDiscovery platform, which has improved performance and increased advertiser spending. The company's fourth-quarter guidance remains strong, with revenue guidance of $1.24 billion to $1.26 billion, a year-on-year increase of 30%-32%; and adjusted EBITDA guidance of $740 million to $760 million, with an adjusted EBITDA margin of 60%. During the financial report conference call, Foroughi stated that AppLovin's goal is to achieve a 30% annual growth rate, partly due to its AI-driven AXON 2.0 ad engine. AI tools have helped improve its ad monetization rate, becoming the biggest highlight in AppLovin's software platform business. AppLovin is a company focused on advertising application software, developing advanced technologies to help businesses of all sizes connect with their ideal customers. Its end-to-end software and AI solutions help companies reach global audiences and achieve monetization and growth. Currently, leveraging AI tools, AppLovin is striving to expand beyond the gaming field, with e-commerce being a key area of focus for the company. Open Source Securities believes that this may be due to the efficiency improvement in ad matching brought about by AppLovin's AI ad engine model, Axon 2.0, and the commercialization potential of AI advertising is worthy of attention. Other Hong Kong-listed companies related to AI applications include Mobvista (01860) and Yidu Tech (02158) with Mingyuan Technology (06682).