How could a 12-year-old company wow investors in 2024, with its stock price rising even more than that of NVIDIA?

Applovin, a mobile technology company from California, has achieved amazing results in 2024. As of December 31st, 2024, Applovin's stock price was approximately US$491.8, an increase of 1166% from US$38.78 at the beginning of the year, far exceeding Nvidia's 171% increase during the same period. Such gains make Applovin one of the best-performing companies on the U.S. stock market in 2024.

In Applovin's latest financial report, the company achieved revenue of US$1.37 billion, a year-on-year increase of 44%, far exceeding analysts' expectations of US$1.26 billion. Among them, advertising revenue soared 73% to nearly $1 billion, demonstrating its strong growth momentum in the advertising business.

On the surface, Applovin's investment is almost inseparable from the gaming field, but in fact, it is the AI ​​marketing engine developed by Applovin-AXON that will really make its stock price soar in 2024. The engine can achieve precision and personalization of advertising through self-learning and model optimization, and provide advertisers with efficient advertising delivery services.

The AI ​​wave began to break out in 2023, and now, all walks of life have been swept by AI. Hardware products such as mobile phones, PCs, and smart glasses can be said to have been reshaped by AI into completely new categories. But in the areas of marketing and traffic that we don’t pay that much attention to, AI also plays a huge role. Applovin is the best example.

More than half of the ads you see may be from Applovin

In 2012, Applovin was established in California, USA. At the beginning, Applovin's business was to establish connections between developers and advertisers, that is, to play a matchmaking role. The year after its establishment, Applovin launched its first mobile platform, AppDiscovery, which is a mobile marketing platform through which advertisers can find potential applications or independent games, and developers can also find advertisers who need to invest in this platform.

AppDiscovery can be said to have brought a brand - new interaction mode to internet marketing. On the one hand, through automated and intelligent advertising placement, it helps advertisers reduce the costs of manual intervention and optimization. Advertisers only need to set the placement area, device type and budget target, and the platform's algorithm will automatically find the most suitable target users. On the other hand, AppDiscovery's global advertising strategy enables advertisers to acquire high - value users worldwide. The platform supports multi - language and multi - region advertising placements, assisting advertisers in expanding into international markets and contributing to the rapid enhancement of a brand's global influence.

Perhaps the success of AppDiscovery has made Applovin taste the sweetness, and it has completely entered a rampage mode in intelligent advertising solutions.

The first step in Applovin’s madness is to buy, buy, buy. First, in 2014, it acquired Adjust, a company specializing in mobile application data analysis. With its help, Applovin began to build a more comprehensive data analysis module and intelligent analysis tools. Subsequently, in 2021, Applovin once again spent huge sums of money to acquire MoPub. If you have heard of Twitter, then you must be familiar with MoPub. That’s right, MoPub is Twitter’s mobile advertising platform.

In addition to acquiring professional data companies and advertising platforms, Applovin also acquired Machine Zone and invested in a number of game studios, including PeopleFun, which created "Wordscapes" and Belka Games, which created "Sky: Children of the Light".

In 2023, Applovin launched the AXON 2.0 advertising service engine. Combined with the data analysis and marketing promotion algorithm capabilities obtained through continuous acquisitions in the previous ten years, the engine quickly occupied the marketing market after its launch. In the marketing manual officially released by Applovin, almost all common advertising types on the market are included. For example, video ads, banner ads, and even the interactive ads that have become popular in the past two years are all marketing services created by Applovin through the AXON 2.0 advertising engine.

Of course, investors were still worried about Applovin in the past because, as a marketing and advertising service provider, it also owns a large number of game companies and participated in the investment of many leading game developers, and these companies may have a lack of transparency in the main business of Applovin. In 2024, Applovin revealed that it would sell its gaming companies and suspend corresponding investment businesses. Subsequently, Applovin's stock price has been rising, even more than the popular semiconductor company Nvidia.

Redefining marketing, Applovin becomes the most successful AI application

As an advertising technology company, Applovin’s biggest bargaining chip is its data training algorithms and traffic analysis tools. However, as a small company, most first-party data companies are unwilling to share data with it. For example, as both advertising service providers, Google owns Google Play, and Meta owns Instagram and Facebook. They naturally have huge user data and advertiser data.

Therefore, Applovin began to acquire and invest in game companies frantically in 2018, thereby obtaining massive first-party data for training intelligent algorithms and improving machine learning efficiency. When Applovin goes public in 2021, its core business will also be divided into two parts: software and games. The software is the aforementioned AppDiscovery and other marketing tools, and the game is the subsequent acquisition and investment business.

In terms of software, in addition to AppDiscovery, Applovin also has a core service - MAX. This tool is actually a platform that helps advertisers and developers trade freely. Its main function is to assist publishers in auctioning their advertising resources, from which Applovin charges a 5% service fee. However, MAX's revenue has always been inferior to AppDiscovery, accounting for only about 20%-25% of total software services revenue.

But MAX provided Applovin with huge training data, which later gave birth to the AXON model.

In essence, the AXON model uses advanced algorithms and focuses on marketing advertising, so its model size does not need to be as large as traditional large language models. But the biggest feature of AXON is dynamic adjustment, which can update the latest data at a faster speed and help advertisers find the highest return delivery model.

Applovin officials avoid talking about the technology of the AXON model. In fact, advertising service providers including Google and Meta will not disclose their self-developed AI advertising algorithms. But for advertisers, what kind of parameters to use may not be the part that needs attention. The rate of return is the key.

Today, AXON is the traffic password in the field of advertising and marketing. Applovin cooperated with Flip, a social commerce service platform, in April 2024 to launch an advertising manager based on AXON. As soon as the news came out, Flip received US$140 million in Series C financing not long after.

What does Flip do with AXON? Simply put, Flip is a platform for sharing good things. Based on AXON's huge user data algorithm, such as interest and hobby matching, it accurately pushes products that users like, and supports quick order placement and immediate delivery.

It can be said that Applovin is a counterattack miracle among advertising service providers. In its early days, Applovin has been widely questioned by investors due to the lack of reference and training data. Compared with leading advertisers, Applovin, which has no social or app store business, has been at a long-term disadvantage. But with the arrival of AXON AI, it has attracted advertisers and investors with its accuracy, speed, and significant rate of return, and has become one of the most popular advertising service providers.

Can Applovin's success be replicated?

The answer is yes.

However, the market competition is still fierce, especially in the field of mobile advertising technology. Not only are there many companies involved, but the technology is constantly iterating. In this environment, simply copying Applovin's successful model may not be enough. Instead, localized innovation needs to be carried out on the original basis and combined with the unique needs and characteristics of the market. For example, paying more attention to social media integration and the integration of mobile payments during the advertising process will help advertising platforms better integrate into the digital ecosystem. For example, e-commerce, short video, and social media environments are more suitable for AI advertising tools for data training and delivery optimization.

Of course, Applovin's success is actually inseparable from three major criteria: the right time, right place and right people. It may be difficult to completely copy its model. If you want to create the next Applovin in the local market, you may have to master precise advertising technology, AI-driven algorithm optimization, in-depth application of data analysis, and continuous market expansion capabilities.