MW AppLovin's stock easily seals its best week ever. It's now up 600% this year.

By Emily Bary

The ad-tech company is now approaching a market cap of $100 billion

One of the best-performing stocks this year is that of an advertising-technology company now knocking on the door of a $100 billion market capitalization.

That's AppLovin Corp. (APP), which makes monetization and marketing tools for mobile games. Shares of AppLovin surged 77% this week to record what was easily their biggest weekly percentage gain on record, as Wall Street cheered the company's latest earnings and outlook.

Now, AppLovin shares are ahead 628% for 2024. That performance is second-best among U.S. stocks this year when looking at companies valued at $10 billion or more, according to Dow Jones Market Data. (Summit Therapeutics Inc. ranks first with a 720% year-to-date gain, while Carvana Co. is third with a 361% rally so far on the year.)

The company finished Friday's session with a market capitalization of about $97 billion.

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AppLovin operates an advertising-recommendation engine called AXON that's been a big winner for the company, especially recently, thanks to updated models and a push into e-commerce tools.

With the e-commerce pilot, "early data has exceeded our expectations, with our advertisers in the pilot seeing substantial returns, often surpassing those from other media channels and in many cases experiencing nearly 100% incrementality from our traffic," Chief Executive Adam Foroughi said on the company's earnings call.

"We're increasingly confident this vertical will scale significantly in 2025 and become a strong contributor for us over the next year and beyond."

Foroughi called the e-commerce pilot the "best product I've ever seen released by us," and also the fastest growing.

The company's latest results showed "once again that investors underestimated how soon AXON 2.0 can deliver another step-up in performance, how quickly margin can expand, and how long operating leverage can sustain," Oppenheimer's Martin Yang wrote.

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He cheered the company's "superior growth and margin profiles, reasonable valuation, and unrealized growth potential in e-commerce."

JPMorgan's Cory Carpenter wrote that AppLovin "has established itself as the clear leader in mobile gaming user acquisition and monetization." But he's reiterating a more measured view of the stock, noting that the company is still in the early innings of trying to scale its platform significantly beyond gaming, all while shares trade at "a notable premium to most ad-tech peers."

AppLovin's stock had its best day ever Thursday, rising 46% following the company's latest earnings, and it gained another 18% in Friday's session.

That could reflect investor perception of how far ahead AppLovin is relative to peer Unity Software Inc. (U), which posted results after Thursday's close.

"The game engine won't grow much more than mid-single digits in '25, and ad tech rebuild has a long hill to climb to catch AppLovin," Macquarie's Tim Nollen wrote of Unity.

-Emily Bary

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November 08, 2024 17:55 ET (22:55 GMT)

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