We recently compiled a list of the 10 AI Stocks Trending On Wall Street Right Now. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against the other AI stocks.
Determined to lead the AI frontier, China is deploying every resource at its disposal and mobilizing every tool in its arsenal. In the latest news, Reuters has reported how the country is now planning to expand its undergraduate enrollments to prioritize what it called “national strategic needs” and develop talent in areas such as artificial intelligence (AI).
Several of China’s top public universities have announced these plans of expansion following the launch of artificial intelligence courses in February. The country recently experienced a “Sputnik moment” after an AI startup from within the country, DeepSeek, launched a cheaper and more efficient AI model which it claimed outperforms its Western counterparts.
READ ALSO: 10 AI Stocks Investors Are Watching Closely Right Now and 12 AI Stocks Making Headlines: Latest News and Ratings
According to analysts, DeepSeek’s success is largely backed by researchers from elite domestic universities. This fact reflects how Beijing’s investment in building a large homegrown STEM talent pool and recent U.S. restrictions on Chinese student visas have enabled the country to catch up on the AI race.
“Scientific and technological innovation has contributed to China’s economic growth, with investment in high-tech industries increasing by 11.1 percent year-on-year from January to October 2022”.
– A report by People’s Daily
Innovation has also opened up new areas for China’s economic development, such as renewable energy vehicles, lithium batteries, and photovoltaic products. The country’s scientific and technological innovations have helped it garner global attention, and it looks like it is neck to neck in competition with its competitor, the United States.
Noting the country’s need for further advancement, Peking University recently said it would add 150 undergraduate spots in 2025, focusing on areas of “national strategic importance”, fundamental disciplines and “emerging frontier fields”. Meanwhile, Renmin University said it would add more than 100 places in areas such as AI to improve innovation.
Shanghai Jiao Tong University will also be adding 150 spots concentrating on “cutting-edge technologies” and emerging industries “urgently needed”, in AI, integrated circuits, biomedicine, healthcare and new energy.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.
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 Fund Holders: 95
AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology. On March 11, Citi kept a “Buy” rating on the stock with a $600 price target. The analyst told investors in a research note how the stock has come under significant pressure due to a few bearish reports that claimed that AppLovin has been misrepresenting the benefits of its AI advertising platform. This was augmented by a broader momentum “unwind”, they noted. Even though consensus revenue estimates “are lofty,” the firm is staying encouraged by AppLovin’s recent disclosures that suggest the e-commerce pilot is performing well.
“Based on peer’s revenue growth rates, EBITDA margins and equity values, AppLovin should be worth $550 a share. 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 investor’s long-held skepticism about AdTech business models.”
-Citi analysts, led by Jason Bazinet, in an investor note.
Overall APP ranks 7th on our list of the AI stocks that are trending on Wall Street right now. While we acknowledge the potential of APP as an investment, our conviction lies in the belief that some 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
