We recently compiled a list of the 15 Best Advertising Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where iClick Interactive Asia Group Limited (NASDAQ:ICLK) stands against the other advertising stocks.
Ad spending in 2024 received a significant boost from recurring events such as the US election and the Olympics, and experts believe that these spending patterns are likely to add billions to the market. Media agency Magna increased its US ad spending forecast for the year, expecting revenue growth of 11.4% to $377 billion, per the news shared with Marketing Dive. The company expects non-cyclical ad spending to grow by 8.9%, reflecting a rise from 8.2% in previous forecasts. This marks one of the best performances for the category in 20 years. This revision stemmed from improved macroeconomic conditions, healthy appetites in digital and streaming, and cyclical events, such as the elections and the Summer Olympics.
Advertising To Top US$1 trillion in 2026, Says PwC
As per PwC, fueling revenue growth by selling E&M products directly to users is challenging. Of the 3 major categories i.e., consumer spending, connectivity, and advertising, consumer spending is the smallest and slowest growing. The connectivity category i.e., fixed and mobile services, topped US$1.1 trillion in 2023. Advertising outpaced consumer spending in 2023 and should top US$1 trillion in 2026. PwC believes that it is expected to grow at a 6.7% CAGR through 2028.
With advertising expected to make up ~55% of total E&M industry growth over the upcoming 5 years, PwC believes that it will become a more important part of companies’ business models. For strategic reasons, all participants in the E&M industry are required to be more skillful at selling ads.
According to PwC, the changes to the way businesses approach the ad business are expected to be seen in 3 key areas. Firstly, the monetization of data is expected to fuel more sophisticated advertising models. Next, the connection will be closer between the discovery of products and services and their purchase and consumption. Finally, it will be important for companies to understand how global privacy regulations impact growth.
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Trends To Watch Out for in 2025
As per Mediatool, key advertising trends to look out for include an emphasis on authenticity, visual content domination, integration of AI, mobile-centric campaigns, and growth of social commerce. AI/ML has become important in the world of digital advertising. As of now, 32% of marketers leverage AI for creating, managing, and optimizing their ads. According to Market.us, the global AI in advertising market is expected to reach $28.4 billion in the year 2033 with a CAGR of 28.4%. This was valued at $6.7 billion in the year 2023. Based on the application, targeted advertising dominated the broader market with a share of 31.1% in 2023.
Our Methodology
To list the 15 Best Advertising Stocks to Buy According to Hedge Funds, we used a screener and sifted through several online rankings. After getting the initial list of 25-28 stocks, we selected the ones having high hedge fund holdings. Finally, the stocks were ranked in ascending order of their hedge fund sentiment, as of Q3 2024.
At Insider Monkey we are obsessed with 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).
An experienced marketing analyst studying data from a previous marketing effort.
iClick Interactive Asia Group Limited (NASDAQ:ICLK)
Number of Hedge Fund Holders: 1
iClick Interactive Asia Group Limited (NASDAQ:ICLK) is a data-driven digital marketing and enterprise solutions provider. It focuses on connecting global brands with Chinese audiences. The company’s services include solutions for digital advertising, customer relationship management, and data analytics.
A series of favorable developments led to a significant increase of more than 350% over the past 6 months in iClick Interactive Asia Group Limited (NASDAQ:ICLK)’s stock price. To begin with, the company announced a merger with Amber Group’s digital wealth management subsidiary, Amber DWM. This deal valued Amber DWM at $360 million. Wall Street believes that this strategic move should enhance iClick Interactive Asia Group Limited (NASDAQ:ICLK)’s market presence and diversify its offerings, creating new growth opportunities.
Next, the sale of its mainland China demand-side marketing solutions business is expected to create long-term opportunities for iClick Interactive Asia Group Limited (NASDAQ:ICLK). This strategic disposal allows the company to focus on higher-margin, lower-risk operations, which has reassured investors about a streamlined and strategic business focus.
The strategic move is expected to enhance iClick Interactive Asia Group Limited (NASDAQ:ICLK)’s liquidity and profitability by focusing on more efficient areas. Furthermore, the company remains committed to repaying outstanding loans, totaling ~US$35 million, previously extended by 3 banks to the disposed business. This repayment is expected to take place within 6 months of the agreement’s execution.
Overall ICLK ranks 13th on our list of the best advertising stocks to buy according to hedge funds. While we acknowledge the potential of ICLK as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than ICLK 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.