We recently compiled a list of the Jim Cramer Discussed 18 Companies That Hit $100 Billion in Market Cap in 2024. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against the other companies that hit $100 billion in market cap in 2024.
Jim Cramer, the host of Mad Money, recently discussed a number of companies that have surpassed $100 billion in market capitalization this year, noting how these companies seem to reflect the current market mood. According to Cramer, it used to be a significant achievement for a company to reach the $100 billion mark, as most companies would never attain that level of market cap.
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He emphasized the immense effort and determination required to achieve such a feat. However, Cramer pointed out that in today’s market, the $100 billion threshold has lost some of its significance, given the recent surge in stock valuations. He highlighted that, as of the market close last Friday, 18 companies had crossed the $100 billion mark in 2024, a notable increase that speaks to the current market dynamics.
Cramer acknowledged that stocks, like everything else, had to contend with inflation, which remains a persistent issue. He went on to say:
“I know we’re experiencing a heightened market, with expectations really running so hot that you can’t believe that a presidential rally, or, let’s say, an end-of-the-year rally and a stock shortage rally are all in play at once. Many of these stocks got clocked today as part of a sell-off that seemed to infect the year’s best performers. I don’t know how long it’ll last, maybe some great buying opportunities already.”
Cramer concluded that the massive influx of capital into the market is a clear driver behind the rise in companies reaching the $100 billion valuation.
“But bottom line: When you get this much money coming in, you can see how all these companies can reach $100 billion, creating a huge amount of wealth, at least on paper. One more reason why it wouldn’t be so bad if some of the winning investors in this market took something delicious off the table.”
Our Methodology
For this article, we compiled a list of 18 stocks that were discussed by Jim Cramer during the episode of Mad Money on December 9. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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 275% since May 2014, beating its benchmark by 150 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: 51
Cramer suggested that AppLovin Corporation (NASDAQ:APP) has the potential to become a highly successful e-commerce company, given its strong performance in advertising within the video game industry.
“The biggest move, and I know you’re gonna think this is inflationary, is the staggering 907% windfall that comes from AppLovin, which makes software that helps app developers grow their reach and monetize their apps. It’s gone from $13 billion at the end of last year to $121 billion, although it was a lot higher on Friday, $142 billion.
Today, the stock got clobbered down 15% because it wasn’t added to the S&P 500, something many traders were expecting, anticipating, gambling on. AppLovin is adapting… and leaning in and pivoting and using its learning. There, worked in all the key buzzwords to become an early-stage e-commerce play that could be wildly successful. They’re so good with their mobile gaming technology that they’ve decided to go all in with video game advertising. These are free mobile games that make their money by showing you ads. Is that worth an almost tenfold gain? The short answer is no. You don’t rally that much in a simple line extension, but what if the same technology could be used for all of e-commerce? Now that’s a much more exciting story and it’s one being told right now.
I can’t fault anyone for suspending the rigor and believing there may be something very big here. Who cares if it might be pure magical thinking, certainly not the investors. Just look at how the stock soared last week when lots of speculators swooped in betting that AppLovin would be added to the S&P 500 after the close Friday. Now, by the way, that’s another thing that tends to happen to stocks worth north of a hundred billion. It didn’t happen. Now they’re getting clobbered.”
AppLovin (NASDAQ:APP) is a company that provides software solutions aimed at improving marketing and monetization strategies, primarily through tools for app measurement, analytics, and in-app bidding. It also runs a portfolio of free-to-play mobile games. The company’s management has expressed confidence in its ability to achieve growth rates of 20% to 30% in mobile game advertising over the near future.
Beyond its core business, the company is branching into new areas that could significantly accelerate its growth trajectory. The company is currently piloting an e-commerce advertising solution, and the early results have been promising. During the third earnings conference call, CEO Adam Foroughi mentioned that initial data had surpassed expectations, with advertisers in the pilot program reporting substantial returns, often exceeding the results from other media channels.
In many instances, advertisers have experienced nearly a 100% incrementality from the traffic driven by AppLovin’s platform. Based on these outcomes, AppLovin (NASDAQ:APP) is optimistic about the potential of this new vertical and expects it to scale considerably by 2025, becoming an important contributor to its revenue in the years to come.
Overall, APP ranks 15th on our list of the companies that hit $100 billion in market cap in 2024 according to Jim Cramer. While we acknowledge the potential of 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 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.
