Axon by AppLovin: AI and the Future of Performance Marketing

AppLovin APP 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 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 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.

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.

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

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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This article originally published on Zacks Investment Research (zacks.com).

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