1. AppLovin Corp. (NASDAQ:APP)
Number of Hedge Fund Holders: 54
Performance (Year-to-Date) as of September 4: 121.15%
AppLovin Corp. (NASDAQ:APP) makes technologies that help app publishers of any size connect to their ideal customers by providing end-to-end software and AI solutions for publishers to reach, monetize, and grow their global audiences. Its products are used by both its gaming advertisers and the connected television market which relies on the Internet.
The company’s platform is gaining traction and attracting higher spend from advertisers, however, they are still working on finding users who meet revenue goals of the advertisers. As its technology improves, the company will find more users which will lead to increased ad spend and growth. Management aims to grow the software business by 20-30% long-term.
In-app advertising has a lot of growth potential. CEO Adam Foroughi emphasized the MAX platform’s role in driving this growth by transitioning from inefficient waterfall methods to programmatic bidding. He expressed optimism about maintaining steady growth rates of 5% to 7% quarter-over-quarter in the software business.
By the end of the second quarter, the company was held by 54 hedge funds. The largest one is valued at $1,105,913,583 by GQG Partners. During Q2, improvement in the company’s software platform generated $711 million in revenue, while app revenue was $369 million. The overall revenue for Q2 2024 was $1.08 billion, a 43.98% year-over-year increase.
AppLovin Corp. (NASDAQ:APP) is well-positioned for growth in the mobile advertising market with its AI-powered platform and strong partnerships. Management has plans to invest in organic growth, focusing on engineering and business development to support AXON technology and e-commerce expansion.
ClearBridge Select Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its first quarter 2024 investor letter:
“We also added AppLovin Corporation (NASDAQ:APP), a disruptor in the IT sector that helps developers market and monetize their mobile apps. Powered by its proprietary targeting engine, the company’s software segment grew robustly in 2023 and should benefit from improving AI efficiency. We believe growth of the company’s targeting engine is still in the early innings as precision continues to improve, its adoption and dataset grow and AppLovin starts to license the engine to e-commerce advertisers, which could open up a brand new multibillion dollar market.”
While we acknowledge the growth potential of AppLovin Corp. (NASDAQ:APP), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the ones on this list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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