Shares of app monetization company AppLovin (APP -3.71%) rose by 712.6% in 2024, according to data provided by S&P Global Market Intelligence. Moves of that magnitude aren't unprecedented, but they're more common among small companies. By contrast, AppLovin started 2024 at a roughly $13 billion market capitalization and surpassed a $100 billion valuation by the end of the year. It was and remains a large-cap stock, making that greater-than-700% gain even more impressive.

AppLovin's biggest gains came after it reported results for 2023's fourth quarter on Feb. 14 and after it reported results for 2024's third quarter on Nov. 6.

Here's the context: In early 2023, AppLovin released a new version of its software called Max 2.0, which was powered by artificial intelligence (AI). Naturally, it took some time for it to gain momentum. But coming out of 2023, AppLovin's revenue growth was clearly skyrocketing. The February 2024 report revealed that in Q4 2023, revenue rose 36% year over year.

Revenue growth for AppLovin was strong in 2024's first and second quarters, rising 48% and 44% respectively. That was when investors expected the benefits from the Max 2.0 release would start tapering off. And that's why they were stunned in November when the company reported Q3 revenue growth of 39%. News that the tailwind from its AI upgrade was still blowing strong sent the stock soaring again.

Profitable software growth for AppLovin

Picture a person scrolling on their phone. They might be an ideal user for a particular mobile app. The company behind that app would love for it to be discovered by that person. This is where AppLovin comes in. Its AI software offers app recommendations. And if they're good recommendations, apps get downloaded.

Apps can also generate extra revenue by allowing AppLovin to display ads on its content. This can create something of a flywheel effect. Assuming AppLovin boosts downloads for its customers, that puts those apps in front of more mobile users, providing even more advertising opportunities. Based on the growth rate since the launch of Max 2.0, I'd say it's getting the job done.

The cherry on top for AppLovin is that its software business growth unlocked massive profitability. It had $357 million in net income in 2023, which isn't bad. But it earned three times as much profit in just the first three quarters of 2024.

APP Revenue (TTM) Chart

APP Revenue (TTM) data by YCharts.

More growth ahead?

With a market cap of over $100 billion, AppLovin is already among the largest companies in the world. What's truly fascinating here is that the company has primarily done business with only mobile gaming apps -- a fairly limited market. But as 2025 revs up, it's looking to expand into other app genres and even aims to carve out a spot in the growing connected TV app space.

I'd be shocked if AppLovin stock gained another 700% in 2025. That said, I don't think the good times are over for its shareholders. This large-cap company is still in growth mode.