The AppLovin story: from mobile game ads to 80x in three years

Have you ever played a free game on your phone and watched a 30-second ad between levels? An ad for another game or app? Quite likely, AppLovin decided who would see that ad, and when.

AppLovin is a company whose name most people don't even know. Its product isn't visible on the screen: it is a set of software tools that helps mobile app owners find new users through ads and earn money from ads inside their own apps.

But on the stock market it wrote one of the wildest stories of the 2020s. On plain closing prices (the stock has not split):

• December 27, 2022: ~$9.30;
• December 22, 2025: ~$733.60.

That is roughly 80 times, in three years. $1,000 invested at the low would have been worth more than $78,000 at the peak. (Prices are calculated from Yahoo Finance data and are approximate.)

The cause of this rise was a new version of an ad algorithm. But before getting there, AppLovin had to climb out of a very deep hole.

AppLovin was founded in 2012 by Adam Foroughi, John Krystynak and Andrew Karam. Until 2014 the company operated in "stealth mode" and raised $4 million from angel investors.

What made it unusual is that it didn't just sell ad software — it also started owning mobile games itself. In 2018 the investment giant KKR bought a minority stake for $400 million. In the following years AppLovin made a series of acquisitions: game maker Machine Zone (2020), mobile analytics company Adjust (2021), and Twitter's ad platform MoPub (announced in 2021, about $1.05 billion).

As a result, in 2020 about half of revenue came from its ad software and more than half from in-app purchases in games. In other words, AppLovin was at once an "ad tech company" and a "game studio".

On April 15, 2021 the company listed on Nasdaq: shares were sold at $80, and the IPO raised about $2 billion. Mobile games were booming during the pandemic, and investors were enthusiastic. In November 2021 the stock closed at around $115.

Then everything went into reverse.

2022 was a hard year for tech stocks: interest rates went up and the pandemic "stay at home" boom ended, and the excitement around mobile games faded with it.

AppLovin's numbers stalled. According to its 10-K, revenue grew just 1% in 2022 to $2.82 billion, and the year ended with a $193 million net loss. Some studios in the games portfolio were sold or shut down, and staff were cut.

That same year the company offered to buy Unity, a game engine maker larger than itself, in an all-stock deal worth $17.5 billion. Unity's board rejected it.

The stock kept sliding. On December 27, 2022 it closed at ~$9.30: about 92% below its 2021 peak and almost 90% below the IPO price. An investor who put $10,000 into the IPO was left with roughly $1,200.

At that price the market saw AppLovin as a company that had stopped growing, carried debt ($3.25 billion at the end of 2022) and was tied to a shrinking games market. The market was missing one thing.

The heart of AppLovin's ad system is a machine-learning model called AXON. Its job sounds simple: out of millions of users, predict exactly which one will install and use an app after seeing a particular ad.

The first version launched in 2021. In spring 2023 the company launched a much stronger new version — AXON 2.0. According to AdExchanger, the model was trained on trillions of in-app events coming in every day from AppLovin's own games. Owning game studios — once seen as a "distraction" — had become a huge data source for the algorithm.

The results showed up immediately. In the second quarter of 2023 software segment revenue grew 28% year over year, and in the third quarter 65%. CEO Foroughi said the new system was "dramatically better than the technologies that we were using" and that its effect on ad campaigns was "immediate" (AdExchanger).

The mechanism is simple: when an advertiser gets more results from every dollar, it spends more dollars. AppLovin takes a share of each ad. When the algorithm improves, both the advertiser and AppLovin earn more.

From then on AppLovin's financial reports became some of the most remarkable in the industry.

• 2024: revenue of $4.71 billion (+43%), advertising segment $3.22 billion (+75%), net income of $1.58 billion — four times the year before.
• 2025: the company sold its game studios to Tripledot and became a pure advertising company (the deal closed in June 2025, total value ~$800 million). For the year, revenue reached $5.48 billion (+70%) and net income $3.33 billion.

AppLovin also moved into new markets. In 2024 it onboarded a few hundred e-commerce advertisers on an invite-only basis; in March 2025 it said this business had reached a billion-dollar run-rate; and in October it rebranded its ad platform as Axon.

The stock "sensed" all this in advance. In 2024 alone it rose more than 700% — according to CNBC, the biggest gain among U.S. tech companies. On September 22, 2025 AppLovin joined the S&P 500. On December 22, 2025 the stock closed at ~$733.60 — about 80 times its low.

But growth that fast always attracts attention. And not all of it was friendly.

In 2025 AppLovin faced several serious attacks. Everything below consists of allegations and reports; none of them has resulted in a court ruling or regulatory finding.

• February 26, 2025. Short sellers Fuzzy Panda Research and Culper Research published reports. They criticized the company's AXON technology; Fuzzy Panda alleged that AppLovin committed ad fraud and illegally tracked children. The stock fell 12% that day.
• March 27, 2025. Muddy Waters alleged that AppLovin "systematically" violates app store terms by extracting proprietary IDs from Meta, Snap, TikTok, Google and others without permission. The stock fell 20% in a day — the biggest one-day drop in its history.
• October 2025. Bloomberg reported that the SEC was examining AppLovin's data-collection practices. The stock fell as much as 19% during the day. No wrongdoing has been alleged against the company; AppLovin said it regularly engages with regulators and would disclose material developments, if any, through public channels.

Foroughi called the short sellers "nefarious", rejected their claims as false, and the company hired well-known lawyer Alex Spiro to investigate their activity.

Meanwhile the stock went through its roughest swings: from the February 2025 peak to April it fell more than 60%, then climbed to new highs. After the December 2025 peak it dropped more than 60% again by early October 2026. Hidden inside the 80x line on the chart are several "lose more than half" episodes.