Behind AppLovin’s Surge and Meta’s 19-Day Rally: Who Says Advertising Is in Decline?

TradingKey – The latest strong earnings report from “Ten Bagger” AppLovin has thrust AI-driven advertising into the spotlight. Meanwhile, Meta’s record-breaking 19-day winning streak—the longest for a Nasdaq 100 stock in over three decades—has also been fueled by the strength of its advertising business.

Recent Q4 2024 earnings from Meta, Google, AppLovin, and Snap have highlighted significant growth in AI-powered advertising, propelling their stock prices higher.

On February 13, AppLovin’s stock soared 24% to an all-time high, bringing its year-to-date gain to 46%. Meta extended its rally to 19 consecutive days, setting a new record with a 24% YTD increase.

The standout performer was AI advertising service provider AppLovin, which reported:

- Q4 revenue: $1.373 billion (+44% YoY)

- EPS: $1.73 (+253% YoY)

Both figures exceeded expectations. The company also forecasted Q1 2025 revenue between $1.373 billion and $1.385 billion, surpassing the consensus estimate of $1.32 billion.

Wedbush analysts described the advertising sector’s Q4 2024 performance as “amazing” and raised AppLovin’s price target from $545 to $620.

Other Ad-Driven Companies Also Outperformed:

- Meta: Ad revenue grew 21% YoY in Q4, up from 18.7% in Q3.

- Snap: Reported its active advertiser count doubled in Q4.

- Google: Ad revenue rose 10.6% YoY to $72.46 billion, surpassing the expected $71.73 billion.

Raymond James analysts noted that earnings from Google, Meta, and Snap suggest a favorable outlook for the online ad market:

“Overall strength in Q4 was fueled by a strong political cycle and holiday season, with mostly positive Q1 guidance factoring in the leap year and ongoing FX headwinds.”

Is the Ad Winter Officially Over?

Not long ago, fears of an “advertising recession” dominated industry discussions.

In 2021, Apple’s privacy changes required apps to obtain user consent for tracking—widely seen as a death knell for targeted advertising.

However, today Wedbush analysts argue that the online ad market is “as healthy as it’s ever been.”

What’s Next for the Ad Market?

U.S. economic momentum remains pivotal. A resilient economy drives consumer activity, which in turn fuels advertiser demand.

Mark Marshall, chairman of global advertising and partnerships at NBCUniversal, noted in December that “normalization” is the best way to describe the advertising market’s trajectory:

“With the election settled, many companies feel that uncertainty over it has disappeared.”

Still, inflationary pressures in the U.S. raise questions about whether consumer spending—and, by extension, ad budgets—could weaken in the months ahead.