We recently compiled a list of the 10 Best Performing AI Stocks in 2025. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against the other AI stocks.
Even amidst the DeepSeek frenzy, artificial intelligence remains the most prevalent theme in the market today. Surging enterprise adoption, expanding use cases, and increasing artificial intelligence infrastructure have led to the AI surge. DeepSeek’s claims that its AI models are more efficient and less costly have now been deemed “largely understated” by several analysts and investors in the tech world. More importantly, tech giants continue their AI investment sprees, demonstrating that the global AI arms race is far from over.
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Recent earnings reports signify that the combined capital expenditures for these tech giants are set to exceed $320 billion in 2025. This is despite investors questioning whether such huge AI spending is even justified when AI models can be developed cheaper and more efficiently. These people are worried that the AI arms race may turn into an expensive gamble. Tech executives are not worried, however. According to them, cheaper artificial intelligence is only going to lead to a higher demand for AI products.
Some analyst firms seem to agree. Here is what Dan Ives from Wedbush Securities has to say:
“Huge week for Big Tech earnings as Zuckerberg, Nadella, Cook, and Musk doubled down on their AI visions and what this means for each of these tech stalwarts looking ahead,” he said in an X post last month. “This is an AI arms race and the Temu of AI DeepSeek not changing that…AI Revolution just starting.”
Even Sundar Pichai, Google’s CEO, has been all praises for DeepSeek, stating that it has done good work that showed how global artificial intelligence is. He stated how he previously anticipated that his company would be the leading player in the AI space, but noted that others would be there in that space too.
With AI investments soaring and competition heating up, the market continues to reward companies that demonstrate strong execution in the artificial intelligence sector. These companies are capitalizing on the AI boom through their strategic investments, market leadership, and strong earnings growth. Let’s move on to explore them.
For this article, we compiled an initial list of AI stocks using ETFs and financial media reports. From this pool, we selected the best-performing AI stocks based on their year-to-date (YTD) performance, as of February 14. These stocks are also popular among 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)
Year-to-Date (YTD) Performance: 57.53%
Number of Hedge Fund Holders: 51
AppLovin Corporation (NASDAQ:APP), provides a leading marketing platform powered by AI technology. AppLovin’s performance has been nothing short of phenomenal, attributed largely to its AI-powered advertising technology. On February 13, Bank of America Securities analyst Omar Dessouky reiterated a “Buy” rating and set a price target of $580.00 for the stock. AppLovin Corporation (NASDAQ:APP)’s strong performance and future growth potential, particularly the surprising success in Q4 largely driven by its Advertising segment, has led the firm to reiterate the buy rating.
AppLovin Corporation (NASDAQ:APP)’s AI Engine has also been effective in various eCommerce categories which in turn positively impacted the company’s financials. Even though Q1 guidance provided by the management has been conservative, ongoing advancements in self-learning models for eCommerce and gaming reflect optimism. The company also plans to launch a self-service solution by the first half of the year, expanding its reach to over 10 million global eCommerce merchants.
Overall APP ranks 3rd on our list of the best performing AI stocks in 2025. 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 timeframe. 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 Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
