"AI super bull stock" soared after hours! AppLovin (APP.US) performance exceeded expectations across the board, announcing the sale of its mobile gaming division.

Leading enterprise in the mobile gaming and app technology sector, AppLovin (APP.US), announced that their revenue for the fourth quarter of 2024 exceeded market expectations. For the quarter ending on December 31st, AppLovin announced an adjusted earnings per share of $1.73, surpassing the market's general expectation of $1.26. The total revenue for the quarter was $1.37 billion, a 44% year-on-year increase, significantly higher than the expected $1.26 billion. The annual revenue for 2024 was $4.7 billion, a 43% increase compared to the previous year. Looking ahead, AppLovin projects that their revenue for the first quarter of 2025 will be between $1.355 billion and $1.385 billion, exceeding the expected $1.32 billion. Over $1 billion of this revenue is expected to come from their advertising department as the company looks to strengthen its artificial intelligence models. AppLovin, driven by its AI-powered advertising system, experienced a surge of over 700% in their stock value last year, reaching a market value of approximately $127 billion. In 2023, the company released an updated version of their advertising search engine called AXON 2.0, which allows for more targeted ads on the game applications owned by the company and is also licensed for use by studios. AppLovin enables developers to market, monetize, analyze, and publish apps through their various platforms. They also collaborate with game developers to promote and distribute games. AppLovin's business is divided into advertising and apps, with the latter mainly consisting of game studios acquired by the company over the years. With the historic growth of their advertising business, the app business has become less important and the company now plans to sell that part of the business. AppLovin announced that they have reached an agreement with an undisclosed private entity to sell their mobile game division. The transaction is valued at $9 billion, including $4 billion in acquiring party's common stock and $5 billion in cash, with the exact amount subject to adjustments. Additionally, the agreement includes a provision allowing the acquiring party to raise up to $2.5 billion in financing for the cash portion. If the acquiring party fails to secure this financing, AppLovin has agreed to provide the same amount in a promissory note. Advertising revenue for the fourth quarter grew by 73% to nearly $1 billion. Previously classified as a software platform, the advertising business is now the main source of income for the company. AppLovin believes it has "tremendous potential" in creating targeted ads for consumer-facing brands in the connected TV space. Last year, the company also started allowing online retailers to purchase mobile ads; analysts see this new business as a potentially huge financial opportunity. The company also disclosed on Monday that Chief Marketing Officer Katie Jansen will be stepping down on March 14, 2025. The company stated that Jansen's departure is unrelated to the company's operations, policies, or procedures. Renowned in the global gaming and mobile advertising industries, AdTech giant AppLovin has broken barriers with astounding growth, making it a "super AI stock" in the eyes of global investors and sparking an investment frenzy around AI applications in the global stock market. Wall Street remains optimistic about the stock. Benchmark started rating AppLovin with a "buy" rating and a target price of $375, highlighting the potential of their AXON AI technology. They anticipate this technology will drive significant growth in the company's core mobile game advertising business. Bank of America Corp reiterated AppLovin as their top pick for 2025, citing the company's software growth, business performance, and e-commerce potential. Lastly, Jefferies Financial Group Inc. reaffirmed their "buy" rating for AppLovin with a target price of $425, citing the potential of AppLovin's e-commerce strategy; they expect the company's e-commerce revenue in 2025 to significantly surpass current Wall Street expectations. However, short-selling institution Captain's Log criticized AppLovin's business practices, suggesting that their growth story mainly stems from related-party transactions and recurring revenue. These latest developments reflect differing views in the market on AppLovin's business strategy and future prospects. After AppLovin announced that their revenue for the fourth quarter of 2024 exceeded market expectations, their stock price soared in after-hours trading. As of the time of writing, the company's stock price had risen over 27%.