11 Best AdTech Stocks to Buy According to Hedge Funds

8) Magnite, Inc. (NASDAQ:MGNI)

Number of Hedge Fund Holders: 20

Magnite, Inc. (NASDAQ:MGNI) offers online advertising solutions. The company is a leading independent sell-side advertising platform that specializes in programmatic advertising throughout multiple channels. Wall Street believes that Magnite, Inc. (NASDAQ:MGNI)’s expertise lies in connected TV (CTV), which remains the fastest-growing segment of digital advertising. The optimism around the company further strengthened when it got selected as the partner to power the Netflix ad-supported tier sale. The collaboration is expected to have a substantial impact on Magnite, Inc. (NASDAQ:MGNI)’s future revenues.

BofA Securities analyst Omar Dessouky believes that the Netflix partnership should result in a $30-million revenue run rate by 2025 end.  Furthermore, the analyst believes that the Netflix partnership should be able to contribute $44 million/$69 million/$199 million to Magnite, Inc. (NASDAQ:MGNI)’s revenue in 2026, 2027, and 2028. Industry experts believe that Netflix should become the company’s largest CTV customer, which should help it offset any weakness from other partnerships.

As Netflix’s ad-supported tier grows, Magnite, Inc. (NASDAQ:MGNI) is expected to see improved revenue without proportional increases in costs. This should result in higher profitability. Furthermore, the company’s growth momentum is expected to be aided by its CTV advertising segment, which should see strong ad spend growth and programmatic adoption.

Magnite, Inc. (NASDAQ:MGNI)’s partnership with Disney got a 2-year extension, which further strengthens a 6-year collaboration. As a result of this, Magnite will help in monetizing Disney’s vast ad-supported content, spanning more than 30 DSPs. Courtesy of this high-profile content, the expanded relationship gives Magnite, Inc. (NASDAQ:MGNI) a strong standing in premium advertising.

Choice Equities Capital Management, a hedge fund manager, recently released its Q3 2024 investor letter. Here is what the fund said:

“Magnite, Inc. (NASDAQ:MGNI) and CROX – Magnite, Inc. and Croc’s Inc. remain holdings in the portfolio and were recently discussed in detail on the Yet Another Value Blog podcast, which can be found here: YAVB podcast. As discussed herein, both remain well-positioned in their respective industries and represent attractive values on anticipated cash flows in years to come. Magnite, as highlighted, looks attractive on its own merits, though shares could become particularly interesting should a handful of industry anti-trust events break their way.”