AppLovin Corporation (APP) Revenues Rose 77% YOY. Here's Why

Sands Capital, an investment management company, released its “Sands Capital Select Growth Strategy” Q3 2025 investor letter. A copy of the letter can be downloaded here. U.S. large-cap growth equities continued to recover from a sharp sell-off in early April. Strong corporate earnings, investor enthusiasm around artificial intelligence (AI), and growing expectations for Federal Reserve policy easing drove the robust gains. The portfolio returned 6.3% (net) in the quarter, compared to the benchmark's 10.5% gain. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its third-quarter 2025 investor letter, Sands Capital Select Growth Strategy highlighted stocks such as AppLovin Corporation (NASDAQ:APP). AppLovin Corporation (NASDAQ:APP) develops a software-based platform for advertisers to enhance the marketing and monetization of their content. The one-month return of AppLovin Corporation (NASDAQ:APP) was -7.10%, and its shares gained 78.47% of their value over the last 52 weeks. On November 26, 2025, AppLovin Corporation (NASDAQ:APP) stock closed at $586.37 per share, with a market capitalization of $198.34 billion.

Sands Capital Select Growth Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its third quarter 2025 investor letter:

"AppLovin Corporation (NASDAQ:APP) is one of the leading providers of advertising solutions for mobile game developers. Second-quarter growth accelerated, with revenues rising 77 percent year over year and EBITDA margins reaching 81 percent—a roughly 900 basis point expansion compared with a year ago. Our focus remains on the significant opportunity for AppLovin to evolve into the fourth major direct response advertising platform by extending its reach beyond gaming into ecommerce. The company advanced toward this goal with plans to launch a self-serve ad manager in beta during the fourth quarter, with a broader rollout expected in early 2026. Self-serve is a defining feature of successful advertising platforms, and AppLovin is pursuing an AI-first approach that emphasizes automation, agents, and AI-driven creative tools rather than relying on a large sales force."

AppLovin Corporation (NASDAQ:APP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 109 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the second quarter, compared to 96 in the previous quarter. In Q3 2025, AppLovin Corporation’s (NASDAQ:APP) revenue increased 68% from last year to approximately $1.405 billion. While we acknowledge the potential of AppLovin Corporation (NASDAQ:APP) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered AppLovin Corporation (NASDAQ:APP) and shared the list of best QQQ stocks to buy according to Wall Street analysts. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.