SaltLight Capital, an investment management company, released its “SaltLight SNN Worldwide Flexible FR Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The Fund generated a return of +15.61% in the third quarter of 2024. This letter discusses the firm’s broad thesis regarding the game industry’s future. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
SaltLight Capital highlighted stocks like AppLovin Corporation (NASDAQ:APP), in the third quarter 2024 investor letter. AppLovin Corporation (NASDAQ:APP) develops a software-based platform for advertisers to enhance the marketing and monetization of their content. The one-month return of AppLovin Corporation (NASDAQ:APP) was 104.54%, and its shares gained 728.80% of their value over the last 52 weeks. On November 20, 2024, AppLovin Corporation (NASDAQ:APP) stock closed at $325.22 per share with a market capitalization of $109.141 billion.
SaltLight Capital stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q3 2024 investor letter:
“This quarter, our notable contributors included AppLovin Corporation (NASDAQ:APP). We start with the current state of the “hit” title-driven market. These dynamics are not new, so many studios have transitioned to free-to-play games (FTP). We then talk about AppLovin, which is at the nexus of making this traditional market successful.
AppLovin is one of these intermediaries strategically positioned in the middle of the Bucket 3 segment
AppLovin has been a standout performer in our fund this quarter. In our 4Q 2023 letter, we highlighted the business, noting how it has built an exceptionally profitable AI-driven business by solving the abovementioned challenges for the game sector.
Saturated Player Time Growth: It’s worth restating the problem: growth in total engagement time has plateaued. The industry’s fight now is to claim a share of that time. But, what if, within this fixed engagement time, there was a scenario where gamers were discovering more relevant games, and, as a result, they might spend more money per hour of engagement – the game studios could still prosper? An analogy would be a scenario in which every employee was matched to their perfect job. They would be more productive, and everyone would be wealthier….” (Click here to read the full text)
A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.
AppLovin Corporation (NASDAQ:APP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the third quarter which was 54 in the previous quarter. AppLovin Corporation (NASDAQ:APP) reported an outstandings third quarter, generating $1.2 billion in total revenue and $722 million in adjusted EBITDA, achieving a 60% adjusted EBITDA margin. While we acknowledge the potential of AppLovin Corporation (NASDAQ: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 timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed AppLovin Corporation (NASDAQ:APP) and shared Alger Mid Cap Focus Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.