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Axon by AppLovin: AI and the Future of Performance Marketing

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Key Takeaways

  • AppLovin launched Axon, transforming from a gaming firm to an AI-powered ad leader.
  • Axon Ads Manager enables AI-based campaign design, optimization and ROI-focused targeting.
  • AppLovin's Q2 revenues jumped 77% to $1.3B as Axon's $1B ecommerce ad run rate gains momentum.

AppLovin (APP - Free Report) is experiencing a milestone October as it accelerates its transformation from a mobile gaming company into a full-fledged AI-powered advertising powerhouse. The firm has rebranded and expanded its ad division under the Axon name, signaling a bold move into advanced performance marketing.

The newly introduced Axon Ads Manager features a self-service dashboard that enables advertisers to design, manage, and optimize campaigns through AI-driven audience targeting and third-party attribution. AppLovin is apparently positioning Axon as an “ROI-first” alternative to the dominant ad ecosystems of Meta and Google, offering greater transparency and measurable performance.

Axon already boasts a $1 billion ecommerce ad run rate, with major clients like Wayfair, Dr. Squatch, and Ashley Furniture reportedly scaling budgets significantly. In the second quarter of 2025, AppLovin’s revenues surged 77% year over year to $1.3 billion, with EBITDA margins reaching 81%. The self-serve rollout is expected to remove scaling bottlenecks and open new revenue streams, solidifying AppLovin’s position in the ad tech landscape.

Competing Forces: Meta and The Trade Desk Step Up

Meta Platforms (META - Free Report) is doubling down on its AI-driven Advantage+ campaigns to maintain dominance amid AppLovin’s Axon push. Meta’s vast user network gives it unmatched reach, but advertisers are increasingly testing alternatives. Meanwhile, The Trade Desk (TTD - Free Report) continues to expand its OpenPath platform, offering transparent programmatic access and positioning itself as a neutral counterweight to walled gardens. The Trade Desk and Meta’s ongoing innovations highlight how competition in AI advertising is intensifying, with AppLovin’s Axon now emerging as a credible challenger in the space.

APP’s Price Performance, Valuation and Estimates

The stock has gained 90% year to date compared with the industry’s 36% growth.

Zacks Investment Research                                                 Image Source: Zacks Investment Research

From a valuation standpoint, APP trades at a forward price-to-earnings ratio of 44, which is well below the industry average of 26. It carries a Value Score of D.

 

Zacks Investment Research                                                    Image Source: Zacks Investment Research

The Zacks Consensus Estimate for APP’s earnings has been on the rise over the past 30 days.

 

Zacks Investment Research                                                               Image Source: Zacks Investment Research

APP currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.


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