Jim Cramer Says We’re Entering a Bear Market and Breaks Down These 10 Stocks

3. AppLovin Corporation (NASDAQ:APP)

Number of Hedge Fund Holders: 95

During a caller interaction, Jim Cramer discussed AppLovin Corporation (NASDAQ:APP), offering a mix of skepticism and acknowledgement of its strong financials:

“AppLovin is very controversial. Okay so let me just dispel one thing. When you have Craig Billings as the CEO of Wynn, as the head of the audit committee and also the lead director of AppLovin, then I’m going to believe the financials [inaudible]. Is the stock expensive? It did have a great fourth quarter. Should someone else come in and take and take away their gross margins? I would like to go into that business and take them away. That company’s making, I say, over-earning is the biggest problem I have with AppLovin.”

AppLovin is a mobile technology and marketing platform that enables developers to monetize and grow their apps. Known for its high-margin software business and rapid expansion, the company has recently generated discussions over the sustainability of its profits.

ClearBridge Mid Cap Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q4 2024 investor letter:

“Stock selection in IT was the greatest contributor to performance on strength in AppLovin Corporation (NASDAQ:APP) and Marvell. AppLovin is the world’s leading mobile game and app advertising platform, providing software for marketing and monetization, powered by its proprietary AI targeting engine Axon. We see opportunity for AppLovin to continue to expand and grow its share of the market for mobile app marketing at a time when mobile gaming ad spend is recovering from a higher-rate-driven trough. We also see the potential for the company to expand its addressable market to include e-commerce advertising, around which initial forays have been encouraging. With strong incremental margins and management keeping expenses controlled, the company should be able to drive significant free cash flow growth as revenue continues to scale.”