1. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 95
Stock Price Return in the last twelve months: 320%
AppLovin Corporation (NASDAQ:APP) is a mobile app technology company that provides a platform for app developers to market, monetize, and analyze their applications. Its services include user acquisition, advertising solutions, and analytics tools designed to help developers grow their businesses and maximize revenue. APP’s platform supports a wide range of mobile apps across gaming, entertainment, and other industries, using machine learning and data analytics to optimize ad campaigns. The company operates globally, connecting advertisers and developers to improve the mobile advertising ecosystem. The California-based company ranked first on our recent list of 10 Hot AI Stocks to Buy Now.
AppLovin Corporation (NASDAQ:APP) has demonstrated extraordinary growth inflection over the past 2 years, driven by their differentiated culture and focus on building a team of entrepreneurial doers. The company expects 20-30% long-term growth in their core gaming ads business, supported by reinforcement learning driving 5% growth per quarter and directed model enhancements contributing at least 10% annual growth. APP is expanding beyond gaming into e-commerce advertising, with early tests showing exceptional results, marking it as their best and fastest-growing product release ever.
AppLovin Corporation (NASDAQ:APP) maintains a highly efficient operating model, achieving approximately 90% flow-through from revenue to EBITDA over the past 4-6 quarters, with expectations for margin improvement. Their strategy emphasizes automation and AI implementation rather than headcount expansion, with plans to actually reduce employee count while growing revenue. The company continues to prioritize share repurchases as the primary use of their substantial free cash flow, with a current $2.3 billion authorization. Looking ahead, APP aims to expand beyond being a niche gaming market player to creating broader digital economies, similar to how major tech companies have built their businesses.
Overall AppLovin Corporation (NASDAQ:APP) ranks first on our list of the 12 best multibagger stocks to buy in 2025. While we acknowledge the potential of APP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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