AppLovin posted better-than-expected earnings, revenue, and guidance after the stock market closed on Wednesday. Shares jumped in late trading on the news, adding to its blistering rally.

The AI-powered advertising technology business reported fourth-quarter earnings of $1.73 a share, ahead of Wall Street forecasts for $1.25 a share and a jump from last year's 49 cents. Revenue in the quarter of $1.37 billion was above the consensus call of $1.26 billion and an increase from $953 million in the prior year.

AppLovin also said it expects first-quarter revenue to be between $1.36 billion and $1.39 billion. Analysts surveyed by FactSet have estimated first-quarter revenue of $1.32 billion.

Shares of AppLovin surged 28% following the results to $489.

"AppLovin is slowly gaining a huge share of the $15 billion ad spending inside mobile games, driving its recent outsized results," Wedbush analyst Michael Pachter wrote in a note before earnings on Monday. He raised his price target to $545 from $270 and maintained an Outperform rating on the stock.

AppLovin went public in 2021 with an initial public offering price of $80. Shares have skyrocketed since then. The stock closed Wednesday up 711% over the past 12 months.

Investors were looking to get updates on the company's AI initiatives, such as Axon. Axon is AppLovin's AI-powered ad tech software.

In a letter to shareholders, Chief Executive Officer Adam Foroughi said that the company is still in the early stages of improving its advertising AI models.

"The roadmap ahead is filled with opportunities for iteration, and as we execute, we believe we can continue to drive value creation for our shareholders," he said.