The company's impressive Q1 earnings and the calculated sale of its games division caused AppLovin's stock price to soar during after-hours

Applovin shares are feeling some loving again

Quick overview

• AppLovin reported strong Q1 earnings, surpassing analyst expectations for both EPS and revenue, which fueled a 19% surge in its stock price during after-hours trading.

• The strategic sale of its mobile gaming division indicates a shift towards focusing on its software and AI-driven advertising business, attracting positive investor sentiment.

• Despite recent volatility, the stock has broken above key technical resistance levels, suggesting a potential continuation of its bullish trend.

• Investors remain cautious due to high valuation concerns and scrutiny over FY 2025 guidance, but the earnings revision trend indicates growing confidence in AppLovin's operational stability.

The company’s impressive Q1 earnings and the calculated sale of its games division caused AppLovin’s stock price to soar during after-hours trading.

Q1 Earnings Beat and Strategic Shift Ignite Investor Optimism

AppLovin (NASDAQ: APP) delivered better-than-expected Q1 results, surpassing analyst projections for both earnings and revenue. This positive surprise was accompanied by a major strategic announcement: the sale of its mobile gaming division. The dual news flow immediately sparked a 19% surge in extended trading, pushing the stock above $359, despite a muted close during the regular session at $303.46 due to investor caution ahead of the earnings release.

The gaming division sale signals AppLovin’s growing emphasis on its software and AI-driven advertising business, which has become its primary growth engine. Investors interpreted the divestment as a bullish signal—focusing capital and resources on higher-margin segments.

Volatility, Recovery, and Technical Breakout

Earlier this year, AppLovin’s stock experienced extreme volatility. After peaking at $525.15 in February following a strong Q4 2024 report, the stock plummeted to around $200 by April, erasing nearly half of its value in just two months.

However, APP found technical support at the 200-day simple moving average (SMA) and gradually began to recover. Today’s post-earnings surge has lifted the stock above the 100-day SMA, a level that had recently acted as resistance.

APP Stock Daily Chart – The Bullish Gap Will Send Apploving Above the 100 SMA

This breakout resets the bullish trend on the daily chart and may mark the beginning of a fresh leg higher. The formation of a large bullish price gap into tomorrow’s open is likely to attract additional buyers, especially technical traders looking for continuation signals.

AppLovin Q1 Earnings: Strong Beat on EPS and Revenue, Guidance in Focus

AppLovin posts a robust first-quarter performance, though shares remain volatile amid sharp recent gains.

Q1 Earnings Overview

• EPS: AppLovin (NASDAQ: APP) reported earnings per share of $1.67, beating analyst expectations by $0.24 (consensus: $1.43).

• Revenue: The company posted $1.48 billion in Q1 revenue, exceeding the Street estimate of $1.38 billion.

• The strong results reflect continued momentum in software monetization and AI-driven ad solutions, which have been growth engines for the firm.

2025 Full-Year Guidance

• AppLovin projects FY 2025 revenue in the range of $1.20 billion to $1.22 billion.

• While solid, the guidance is being scrutinized by investors due to the sharp rally in share price over the past year.

Earnings Revision Trends

• Over the past 90 days, analysts have issued 2 positive EPS revisions and 0 negative.

• This trend points to increasing confidence in AppLovin’s earnings power and operational stability.

• Investors continue to watch whether elevated expectations are sustainable in coming quarters.

Conclusion: Strong Results, But Expectations Remain High

AppLovin’s Q1 beat on both earnings and revenue confirms its position as a fast-growing tech player, especially in the AI and mobile advertising space. However, with the stock already up more than 300% in the last year, valuation concerns and guidance scrutiny may cause near-term volatility. Investors are likely to remain cautious until there’s further clarity on whether FY 2025 performance can sustain current multiples. Still, the earnings revision trend and execution strength make APP a stock to watch closely.

AppLovin’s strong Q1 performance and strategic refocus on its core software business have restored investor confidence. The sharp rebound from recent lows, technical breakout above key resistance, and fresh momentum place APP stock firmly back on the bullish radar. If follow-through buying materializes at the open, the stock could retest previous highs in the weeks ahead, particularly if broader tech sentiment remains supportive.