Jim Cramer Discussed These 15 Stocks Recently

3. AppLovin Corporation (NASDAQ:APP)

Number of Hedge Fund Holders: 95

While discussing standout IPOs, Cramer highlighted AppLovin (NASDAQ:APP) as a prime example of a company that defies traditional valuation metrics:

“Let’s start with a company almost nobody’s heard of: AppLovin. It came public in 2021, and now it’s an $18 billion company helping mobile video game developers with in-game advertising. That’s how most of these games make money. […] The stock’s up because they’ve got stunning growth, hard to believe. But here’s the problem: it still sells for over 75 times this year’s earnings. How do you value that kind of growth? Honestly, I have no idea. It’s whatever the market will bear, and I can’t invest like that.”

AppLovin provides software solutions that enable app developers to maximize revenue through targeted advertising and user acquisition. Its recent quarterly report blew past expectations, with earnings of $1.73 per share, far above the expected $1.26 and nearly quadrupling the $0.49 EPS from the previous year.

Despite its impressive growth, Cramer believes this is a very speculative stock, comparing investing in AppLovin to gambling:

“This one feels like you’ve got a nine and a face card in blackjack, you hit, and you pull a two. It’s that uncertain.”