Jim Cramer Discussed These 10 NASDAQ 100 Stocks Recently

4. AppLovin Corporation (NASDAQ:APP)  

Number of Hedge Fund Holders: 51

Talking about overly loved stocks, Cramer mentioned AppLovin Corporation (NASDAQ:APP) and said:

“Last year that stock was AppLovin, the best performer in the Nasdaq, which places ads in mobile video games among other tasks. Of course, they use AI and advanced algorithms to target their advertising. Of course, they do a great job. Of course, there is none better until of course, somebody else comes along with something cheaper, stronger, more powerful, and more app lovable and that’s why 8% of the company shares are sold short. People know that competition is inevitable.

Honestly, I think Google could dominate this space in a heartbeat if they weren’t worried about the Justice Department’s antitrust division, although those goons will soon be broomed. I’m betting 2025 will be the year when venture capitalists start funding proposals for AppLovin alternatives, which is why I can’t endorse the stock here at nearly 60 times this year’s earnings estimates. But try telling that to the true believers who set it up 713% last year, another 5.5% today, which frankly I find utterly ridiculous. I mean enough AppLovin already.”

AppLovin (NASDAQ:APP) is a software company that provides tools focused on improving marketing and monetization for mobile apps, offering solutions for app measurement, analytics, and in-app bidding. In addition to its software solutions, it operates a portfolio of free-to-play mobile games. Recently, the company has gained considerable attention for its performance in the AI sector, with its stock becoming one of the market’s hottest.

The company saw significant growth in 2023, especially with the launch of its Axon 2 advertising technology in the second quarter. The AI-powered Axon 2 helped boost the company’s software platform revenue by 66% in the third quarter of 2024. However, its legacy apps business, which includes gaming apps, only saw a modest 1% growth. Recently, analyst Omar Dessouky from BofA, using in-app-purchase tracking data, predicted a 4% decline in the company’s app revenue for the next quarter, though he noted that any softness in the gaming segment may not heavily impact overall performance.

It is worth mentioning that AppLovin’s (NASDAQ:APP) net income in the third quarter of 2024 soared 300%, reaching $434.4 million. Additionally, management has expressed confidence in achieving growth rates of 20% to 30% in mobile game advertising. For the fourth quarter of 2024, the company expects revenue between $1.24 billion and $1.26 billion, marking an approximate 31% increase at the midpoint of the range, which exceeded analysts’ expectations of $1.18 billion, as per CNBC.