Using ab-initio simulations, we demonstrate amplification of extreme-ultraviolet (XUV) radiation during transient absorption in a high-harmonic generation type process using the example of the hydrogen atom. The strong IR driving field rapidly depletes the initial ground state while populating excited electronic states through frustrated tunnelling, thereby creating a population inversion. Concomitant XUV lasing is demonstrated by explicit inclusion of the XUV seed in our simulations, allowing a thorough analysis in terms of this transient absorption setup. Possibilities for increasing this gain, e.g. through preexcitation of excited states, change of the atomic gain medium or through multi-center effects in molecules, are demonstrated. Our findings should lead to a reinterpretation of recent experiments.