We recently published a list of Top 10 Stocks Everyone is Talking About. In this article, we are going to take a look at where AppLovin (NASDAQ:APP) stands against other top stocks everyone is talking about.
Investors are on tenterhooks amid the latest selloff as they keep up with President Donald Trump’s volatile tariff policies and assess the slowing enthusiasm in the AI trade. Trivariate’s Adam Parker said in a latest program on CNBC that while he wants to be bullish on the stocks for a rebound, he believes we haven’t seen the bottom yet. The analyst recommends going on the defense:
“I mean every part of me wants to get bullish again, right? You know, we had the good call of saying the market will be down in the first half and choppy with concerns about tariffs and all that. And you know, now we’ve seen a lot of people who were bullish before throwing in the towel and getting bearish, and I really want to do it, right? But I can’t. And the reason is because I don’t think we’ve seen enough of a blowoff on the positioning. I mean, if you look at the companies that were talking at big conferences in March, a lot of things are slowing. And so I think this is more than a growth scare already—this is actually like a growth slowdown. And so the question is, will we get negative guidance in April? Will we see companies guide down and the stocks not go down? If I see that behavior, then I’ll probably want to get more risk on. But until then, I think we have to play a little bit more defense.”
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For this article, we picked 10 stocks Wall Street analysts are showing interest in. With each stock, we have mentioned their hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.
AppLovin Corporation (NASDAQ:APP)
Number of Hedge Funds Investors: 51
AppLovin (NASDAQ:APP) shares are down 14% so far this year, but some analysts are reiterating their bullish view on the stock.
Citi Research remains bullish on the digital advertising and e-commerce company, keeping a Buy rating and a $600 price target.
Citi attributes the decline in stock value to “a series of bearish reports that, we believe, make spurious claims about AppLovin and a broader sell-off in momentum stocks.”
“Based on peer’s revenue growth rates, EBITDA margins and equity values, AppLovin should be worth $550 a share,” Citi analysts, led by Jason Bazinet, wrote in a note to investors. “The prevailing equity value (of $260) suggests the market is ascribing a ~50% likelihood that AppLovin’s equity is worth $0. That strikes us as remarkably high. We suspect this has less to do with the merits of the bears’ claims. More likely, in our view, it stems from AppLovin’s rapid success, opaque business model and investors’ long-held skepticism about AdTech business models.”
ClearBridge Mid Cap Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q4 2024 investor letter:
“Stock selection in IT was the greatest contributor to performance on strength in AppLovin Corporation (NASDAQ:APP) and Marvell. AppLovin is the world’s leading mobile game and app advertising platform, providing software for marketing and monetization, powered by its proprietary AI targeting engine Axon. We see opportunity for AppLovin to continue to expand and grow its share of the market for mobile app marketing at a time when mobile gaming ad spend is recovering from a higher-rate-driven trough. We also see the potential for the company to expand its addressable market to include e-commerce advertising, around which initial forays have been encouraging. With strong incremental margins and management keeping expenses controlled, the company should be able to drive significant free cash flow growth as revenue continues to scale.”
Overall, APP ranks 7th on our list of top stocks everyone is talking about. While we acknowledge the potential of APP, our conviction lies in the belief that under the radar 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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Disclosure: None. This article is originally published at Insider Monkey.