We recently published a list of 11 Best AdTech Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Taboola.com Ltd. (NASDAQ:TBLA) stands against the other best Adtech stocks to buy.
As per Dimension Market Research, the Global AdTech market size touched US$1,066.8 billion in 2023 and should reach US$3,528.4 billion by 2032. The market is expected to compound at ~14.2% from 2024 to 2032. Some of the critical trends include a strong emphasis on privacy-centric advertising, growth fueled by AI-driven personalization, and dominance of video and mobile advertising.
Key Trends Defining the AdTech Market
Artificial Intelligence and Machine Learning continue to drive sophisticated audience segmentation and personalized ad experiences. As per Geomotiv, a software development company, these technologies can quickly analyze vast amounts of data, predict user behavior, and tailor ads in real time. Collectively, these features help to improve engagement and conversion rates. The benefits of personalization and the opportunities provided should drive the demand for these solutions and the growth of AI-oriented AdTech companies.
Market experts believe that advertisers continue to target Programmatic advertising. This space continues to expand beyond traditional digital channels. Adnimation, a software company, highlighted that CTV ad spending is expected to grow to $42.4 billion by 2027 in the US. Publishers that have video content should prioritize CTV and find for best supply-side platform (SSP) to tap into a rapidly growing market.
Advertisers have been leveraging programmatic to reach the audiences with targeted ads. Furthermore, programmatic continues to make inroads into the audio format, such as podcasts and music streaming services. Next, AdTech SaaS companies have been providing customizable solutions, which enable advertisers to tailor the tools and features as per the specific needs. The popularity of these products continues to grow among advertisers and publishers.
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Blockchain and Influencer Marketing Should Drive Growth
As per Adnimation, data-driven influencer marketing is expected to dominate the broader AdTech market. Furthermore, the publishers and their AdTech counterparts continue collaborating with micro-influencers to fuel engagement and conversions. Blockchain technology should also be key in ensuring transparency in digital ad transactions. By decentralizing ad transactions, blockchain can help reduce ad fraud, improve trust between publishers and advertisers, and enable accurate tracking of ad performance. This will result in more reliable revenue streams. Adnimation also believes that, by 2025, video is expected to dominate digital ad formats, making up 82% of all internet traffic.
Our Methodology
To list the 11 Best AdTech Stocks to Buy According to Hedge Funds, we scanned through online rankings and AdTech-focused ETFs. After getting the initial list of 20-25 stocks, we shortlisted the ones having high hedge fund holdings. Finally, the shortlisted stocks were arranged 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).
A close up of a mobile device displaying a customized AI-based algorithm interface.
Taboola.com Ltd. (NASDAQ:TBLA)
Number of Hedge Fund Holders: 27
Taboola.com Ltd. (NASDAQ:TBLA) operates as an advertising agency. It helps publishers, advertisers, and marketers reach their target audiences by recommending personalized content, products, or advertisements to users. Taboola.com Ltd. (NASDAQ:TBLA)’s upward trajectory is expected to be aided by leveraging AI technology, expanding its advertiser base, and capitalizing on strategic partnerships and initiatives. The company’s strategic partnerships, such as a 30-year deal with Yahoo, expand its reach and further cement its market position.
Wall Street analysts believe that the partnerships should unlock a potential $1 billion in annual revenue and bring in high-value advertisers. The company also entered into an exclusive agreement with Apple which focuses on integrating native advertising in Apple News and Stocks apps. This further solidifies its position. Taboola.com Ltd. (NASDAQ:TBLA)’s strong emphasis on delivering value to advertisers, with the help of its innovative product offerings and expanding reach, should act as a tailwind.
Taboola.com Ltd. (NASDAQ:TBLA) continues to make investments in AI technologies such as Abby and Max Conversions, which should drive advertiser success and yield growth over the upcoming quarters. The company highlighted that ~91% of advertisers are already using or considering implementing Generative AI technology. Advertiser adoption for GenAI increased significantly due to their focus on improving efficiency and driving more sales.
Overall, TBLA ranks 5th on our list of best AdTech stocks to buy according to hedge funds. While we acknowledge the potential of TBLA 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 time frame. If you are looking for a deeply undervalued AI stock that is more promising than TBLA 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.