TLDR
- AppLovin (APP) will join the S&P 500 on September 22, 2025, replacing MarketAxess Holdings
- The stock has surged 456% over the past year and 4,650% since January 2023, outperforming Palantir’s gains
- Q2 revenue jumped 77% year-over-year to $1.26 billion with 168% earnings growth driven by Axon 2.0 AI engine
- Wall Street maintains Strong Buy rating with average price target of $530.59, indicating 8.2% upside potential
- Company plans to launch self-service advertising platform in October 2025 and expand into e-commerce advertising
AppLovin stock jumped 6.5% in extended trading Friday following news of its inclusion in the S&P 500 index. The mobile advertising technology company will officially join the benchmark index on September 22, 2025.
The stock has delivered remarkable returns for investors. Over the past year, APP shares have climbed 456%. Since January 2023, the gains reach an eye-popping 4,650%.
This performance has doubled the returns of AI darling Palantir during the same period. Palantir managed a still-impressive 2,280% gain since January 2023.
AppLovin will replace MarketAxess Holdings in the S&P 500. Robinhood Markets and Emcor Group will also join the index, replacing Caesars Entertainment and Enphase Energy respectively.
The company’s artificial intelligence platform has captured Wall Street’s attention. AppLovin’s Axon 2.0 recommendation engine uses machine learning to match advertisers with mobile game users. Morgan Stanley analysts have called Axon a “best-in-class machine learning ad engine.”
Strong Financial Performance Drives Investor Interest
AppLovin’s second quarter results showcased the power of its AI technology. Revenue surged 77% year-over-year to $1.26 billion. Earnings per share jumped 168% to $2.39.
The company has beaten earnings estimates in six consecutive quarters. The average beat during this period was 23%. Wall Street expects earnings to grow 54% annually through 2026.
These results came despite attacks from short sellers. Fuzzy Panda Research, Muddy Waters, and Culper Research have all targeted the company. The strong financial performance has helped maintain investor confidence.
Jefferies analyst James Heaney recently raised his price target to $615 from $560. The five-star analyst increased his fiscal 2026 revenue estimate by 2% following meetings with management. Heaney sees multiple growth drivers ahead for the company.
Expansion Plans Could Unlock New Markets
AppLovin traditionally focused on mobile game advertising. The company is now testing solutions for e-commerce brands. This expansion could increase its addressable market more than tenfold.
The company plans to launch a self-service advertising platform in October 2025. CEO Adam Foroughi calls this solution “the foundation for our next decade of growth.” A global rollout will follow in 2026.
AppLovin currently offers managed advertising services. The self-service platform represents a shift toward letting brands manage their own campaigns. This approach could attract smaller advertisers who prefer hands-on control.
The company benefits from ongoing changes in the mobile advertising landscape. Apple’s dispute with Epic Games has led to App Store policy changes. These modifications are expected to help mobile advertisers and app developers.
Historical data suggests S&P 500 inclusion provides additional momentum. Over the past decade, 159 companies have remained in the index for at least one year after joining. These stocks averaged 13.9% returns during their first 12 months in the index.
Index funds tracking the S&P 500 must purchase newly added stocks. This mechanical buying creates additional demand for shares. The increased visibility from S&P 500 membership also tends to boost investor sentiment.
Wall Street maintains a Strong Buy consensus rating on AppLovin stock. The rating is based on 16 Buy recommendations and three Hold ratings. The average price target of $530.59 suggests 8.2% upside from current levels.
AppLovin trades at 70 times earnings, which appears reasonable given the expected 54% annual earnings growth through 2026. The company competes against tech giants like Google, Meta, and Amazon in digital advertising. However, its specialized AI engine has helped carve out a profitable niche in mobile game advertising.
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