AppLovin Surges on Earnings: What's Next for This Tech Standout?

Key Points

• AppLovin continues to impress markets with its financial results. The stock has now risen after 11 of its last 13 earnings releases.
• The company also excited investors with the sale of its gaming business and provided compelling new details surrounding its e-commerce push.
• The United States and China trade deal adds more juice to this name, in potentially more ways than one.

Like a phoenix, AppLovin NASDAQ: APP has risen from the ashes in 2025, now solidly in the green for the year. 

The tech company’s latest earnings results and news of Trump’s trade deal with China put shares up around 7% in 2025 as of the May 12 close. 

This is quite a comeback, given the stock was down over 30% through early April. AppLovin successfully leveraged its opportunity to show strength in Q1, with shares rising nearly 12% after its May 7 earnings release.

So, what went well in Q1 for AppLovin, and do the company’s prospects remain strong going forward? Additionally, what impact is Trump’s trade deal projected to have on the company?

AppLovin’s Q1 Results Leave Markets With Nothing but Good Vibes

AppLovin really did crush expectations with Q1 earnings. The company’s revenue growth came in at 40%, nearly 10% faster than Wall Street anticipated. This helped the company achieve adjusted earnings per share growth of 149%, well above the 115% increase forecasted. The company also had several other wins that added to these headline figures.

AppLovin announced it had finalized the sale of its mobile gaming segment to Tripledot Studios. This allows the firm to focus solely on its advertising business, which is driving its growth. Its e-commerce push is also going well, operating at a $1 billion annual run rate.

AppLovin is less than 0.1% penetrated into this market, highlighting a massive opportunity. The churn rate among high-spending e-commerce advertisers is under 3%, showcasing strong product-market fit. The company’s new self-service dashboard, launching this quarter, is another tailwind for adoption and margins.

Trade Deal Provides More to Like, Despite AppLovin’s Already Limited Exposure

AppLovin noted that 90% of its advertising revenue comes from mobile games, which are not directly impacted by tariffs. However, the trade deal has multiple positive impacts for AppLovin. Overall, the trade deal means that many businesses can expect to face significantly lower costs than they were expecting prior. This means that they could have more money to spend on advertising with AppLovin.

Additionally, the deal could help light the path in AppLovin’s bid to merge with TikTok. The United States and China reportedly halted discussions over the sale of TikTok after Trump announced reciprocal tariffs. The countries needed to resolve the tariff issue first before they finalized a TikTok deal. With a significant breakthrough in the trade talks now occurring, the parties could resume progress on the sale of TikTok.

Although AppLovin admits the deal is a “long shot," it could be massive for the firm if it happens. Such a deal would give AppLovin access to massive amounts of data, which it could use to make its advertising algorithms much more effective. AppLovin also argues it could significantly accelerate the monetization of TikTok, potentially creating huge value.

The company may also have a leg up in the deal due to its size. With a market cap of approximately $117 billion, AppLovin remains a small fish compared to the Magnificent Seven companies vying for TikTok. This means that it could face much less pushback in the way of antitrust concerns. Overall, investors should see a potential TikTok merger as adding speculative upside to the stock, but they shouldn’t count on it in any way.

AppLovin Continues to Have Catalysts, Analysts See Near 30% Upside

AppLovin continues to execute to a tee. The firm has a massive growth opportunity ahead through its e-commerce business. Trade war de-escalation is another positive, and a potential TikTok deal is the cherry on top. Despite the massive run-up in shares, it is hard to get scared off from owning this name given the fantastic financial results. On average, Wall Street analysts' price target updates tracked by MarketBeat post-earnings indicate upside of 29% in shares.