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- Clicks And Giggles: Can The Adbot Keep Printing Money
Clicks And Giggles: Can The Adbot Keep Printing Money
Noah Zelvis
October 19, 2025
A turbocharged AI ad engine just sprinted from gaming into e-commerce and the open web.
The run has been epic, the bar is sky-high, and the next few quarters will prove if this thing travels.
Think starter size on dips, add only if new categories stick and profits scale.
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What Just Happened, Without the Wonk
AppLovin (NASDAQ: APP) is the mobile ad platform that used to be that gaming company and is now the AI ad machine people won’t shut up about. The stock is around $606, up about 77% this year and a ridiculous 318% over 12 months.
Market cap sits near $205B, the P/E ~86 says expectations are high, and the 52-week range is $141–$746. Last quarter was a flex, though. Revenue was up 77% to $1.26B, profits ramping, and management talking up Axon 2.0 like it just benched three all-stars and still won by 30.
Analysts are fanning themselves. You’ve seen targets in the $630–$860 zip code, a spot in the S&P 500, and a steady drumbeat of top pick notes. That’s the good news. The other news: after a run like this, the bar is way up in the rafters, and small misses can feel like face-plants.
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The Story, In Plain English
AppLovin’s secret sauce is Axon, a brainy engine that decides who sees which ad, when, and at what price. It does this loop hundreds of millions of times a day, learning what actually converts and then bidding accordingly. Think of it as a ruthless, polite robot that only cares if an ad leads to a click that turns into money.
The company mastered this in mobile games first, where the feedback loop is clean. You show an ad, someone installs, they make a purchase, the system learns immediately. Once that loop worked, AppLovin started taking Axon to e-commerce and the open web, where budgets are bigger and the world is messier.
Early signs look solid. Big checks from advertisers testing the waters, rising spend, and a self-serve Ads Manager rolling out so smaller brands can DIY their campaigns.
At the same time, AppLovin has slimmed its identity. Less we make games too, more we’re the tool that helps everyone else make money. Cleaner story, cleaner margins, and less whining from investors about conflicts between owning studios and running the ad rails.
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Why Bulls Are Pounding The Table
The engine works. When you see revenue up 70-plus percent and profits ramping, that’s not just ad spend magically returning. It usually means the algorithm is winning auctions more efficiently and squeezing more value per impression.
Bigger hunting grounds. Games are big, but e-com and web are massive. If Axon can keep the win rate outside its home turf, there’s a multiyear runway of wallets to tap.
Product velocity. A self-serve door invites thousands of mid-market brands into the party. That can smooth the sales cycle and diversify revenue away from a handful of whales.
Network effects, quietly. Better outcomes attract more advertisers. More spend gives Axon more data. More data sharpens targeting. Round and round we go.
Credibility and buyers.S&P 500 inclusion, higher price targets, and the “AI” stamp on the label draw in a wider base of investors who weren’t allowed to touch it before.
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Why Bears Keep A Helmet Handy
Valuation vertigo. A hot P/E and a stock that tripled in a year means expectations are doing a lot of the heavy lifting. If growth cools, gravity still works.
New terrain is harder. The web is messy. Attribution gets fuzzy. Cookies and privacy rules change all the time. What works in a clean gaming loop may need extra elbow grease elsewhere.
Big rivals aren’t napping. Meta and Google have armies of engineers and oceans of data. If they tune up their conversion tools further, some budgets drift back to the giants.
Headline and policy risk. Adtech lives near regulators. Questions about data use can pop up out of nowhere. Most end up as noise, until one doesn’t.
Volatility. This ticker can move five percent while you’re reheating lunch. Great on the way up, less cute when a routine quarter turns into a selloff.
What To Watch (and why it matters)
Advertiser count and mix. More brands, especially outside gaming, means the expansion is real. A broader base also lowers risk if one category slows.
Spend retained after tests. Anyone can juice a pilot. The tell is how much budget stays and grows the next quarter.
Take-rate stability. Fancy term, simple idea: how much of every ad dollar AppLovin keeps. If it holds or inches up while volumes grow, you’ve got leverage.
Self-serve adoption. If thousands of smaller advertisers start using Axon Ads Manager, growth can compound without hiring an army of sales reps.
Profit per dollar of revenue. Margins don’t need to moon, they just need to stay healthy while the top line scales. If profit dollars grow faster than sales, that’s the dream.
A Simple Map For Positioning
Starter only on dips. After a monster run, consider 1%–2% position size on pullbacks, not breakouts. That keeps emotions in check if the next headline is good, not amazing.
Add on proof. Scale up toward 3%–4% only if you see two quarters where 1) non-gaming advertisers and spend both expand, 2) take-rate holds or improves, and 3) profit per dollar keeps climbing.
Respect the heat. If APP sprints back toward recent highs on hype alone, trim and wait. This stock loves a round-trip.
Scenarios You Can Actually Picture
Base case. Growth cools a touch but stays strong as e-com and web add fuel. Margins remain stout. The stock chops in a range, leaning higher as proof accumulates.
Bull case. Axon travels well outside gaming, self-serve adoption snowballs, advertiser count jumps, and take-rate doesn’t blink. Profit flies faster than revenue. Shares grind toward the upper end of the analyst camp and then some.
Bear case. New categories are lumpier than hoped, take-rate slips to win deals, or a privacy curveball gums up attribution. Growth slows, the multiple compresses, and the chart tests investors’ yoga practice.
A Quick Jargon Lightening Round
Axon. The brain doing the math on which ad to show and how much to bid. Fewer guesses, more results.
Self-serve. A portal where advertisers run their own campaigns without a sales rep holding their hand. Scales faster, costs less.
Take-rate. The slice of ad spend AppLovin keeps. Higher is better, as long as advertisers still hit their goals.
The Vibe Check
This is one of those rare adtech stories where the product narrative and the financials are singing the same song. The risk is not does it work, it’s how far can it stretch and how much is already priced in. If you keep the sizing sane, insist on proof outside gaming, and watch the take-rate, you can let the trend do the heavy lifting without pretending you’ve discovered a risk-free rocket.
Bottom Line
AppLovin leveled up from game ads to an AI-powered performance platform with real teeth. The opportunity gets bigger as it steps into e-commerce and the broader web, and the early signs say the engine travels well. Just remember the altitude.
Start small on weakness, add only when new categories, self-serve, and profit flow-through show up together. If those boxes keep getting checked, you don’t need a hero cape. You just need patience.
Action Recap
✅ Starter 1%–2% on pullbacks.
✅ Add toward 3%–4% only after two quarters of non-gaming growth, solid take-rate, and rising profit per dollar.
⚠️ Trim into hype spikes.
👀 Track advertiser count, retained spend, self-serve usage, and margins.
That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.
Best Regards,
—Noah Zelvis
Tech Stock Insider