11 Best AdTech Stocks to Buy According to Hedge Funds

4) DoubleVerify Holdings, Inc. (NYSE:DV)

Number of Hedge Fund Holders: 33

DoubleVerify Holdings, Inc. (NYSE:DV) offers a software platform for digital media measurement and data analytics. The company focuses on ensuring the effectiveness, quality, and security of digital ad campaigns throughout multiple platforms.

Given its strong foothold in the industry, DoubleVerify Holdings, Inc. (NYSE:DV) has achieved a duopoly status. The company continues to focus on product innovation rather than sales expansion which has placed it favorably in a consolidating market. Wall Street believes that DoubleVerify Holdings, Inc. (NYSE:DV)’s growth momentum should be fueled by its partnership with Meta Platforms, Inc. (NASDAQ:META). The anticipated launch of prebid tools on Meta’s platform in early 2025 should unlock additional social revenue opportunities.

The partnership with Meta provides DoubleVerify Holdings, Inc. (NYSE:DV) access to Meta’s vast user base throughout a family of apps, such as Facebook, Instagram, and WhatsApp. This will allow the company to provide its measurement and verification services to a broader range of advertisers.

The company has also introduced the Inflammatory Politics and News category on Meta, which focuses on protecting advertisers from aligning with controversial content. This new feature is aided by DoubleVerify Holdings, Inc. (NYSE:DV)’s Universal Content Intelligence, an AI-powered engine ensuring precise content categorization throughout the platform. The company’s duopoly status was further strengthened by industry consolidation, such as Oracle’s exit from the ads business. This provides new client acquisition opportunities.

DoubleVerify Holdings, Inc. (NYSE:DV) demonstrated its competitive strength via high win rates in RFP processes, mainly in acquiring former Moat clients. The London Company, an investment management company, released a second-quarter 2024 investor letter. Here is what the fund said:

“Initiated: DoubleVerify Holdings, Inc. (NYSE:DV) – DV develops software platforms for digital media measurement, data, and analytics. DV sells a critical insurance-like product known as “ad verification,” designed to create transparency, eliminate fraud, and drive ad-spending optimization. Ad verification has reached a point of mass acceptance among digital ad buyers due to its measurable low cost/high reward value proposition. DV operates in a duopoly where it commands the leading market position (>50% market share), by focusing on product innovation rather than sales expansion. DV’s business should continue to benefit from secular tailwinds in digital advertising. Incremental revenue growth should be accretive to returns on capital, given the its high cash margins and minimal capex needs. We initiated our position following a pullback, allowing us to purchase an advantaged company growing at a double- digit rate, with high margins, at a market multiple.”