We recently compiled a list of the 12 Best Growth Stocks to Buy and Hold for the Long Term. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against the other growth stocks.
What’s the Bull Case for US Equities?
The market closed last week mostly lower, however, the S&P 500 has been up more than 7% since April 11, indicating a returning positive sentiment. On May 10, David Lefkowitz, Equity Strategist at UBS Global Wealth Management, joined CNBC to discuss his bull case for the US equities. Lefkowitz acknowledged the volatility that has been around since the tariff announcement; however, he believes that backdrop remains fairly constructive. He elaborated that the market has had some significant buy signals since early April, characterised by the volatility index giving one of the highest readings, investor sentiment being cautious, and investor positioning has been depressed. Historically speaking, whenever these things have happened in the past, the US equities have performed exceptionally well in the preceding 6 to 12 months. Lefkowitz noted that he is not too concerned with the day-to-day news and volatility, as the market will get choppy on trade negotiation deals. Rather, he is more focused on the bigger picture, which indicates that stocks will ultimately end up higher over the next 12 months.
While answering a question regarding the recent rebound in the market, Lefkowitz highlighted that when the volatility index comes down, as it has over the past few weeks, history tells us that the market does not make new lows. Although the market will still be chopping a little. However, it is anticipated to stay within the historic average of 5%. Moreover, the equity strategist is also not concerned about the valuations and believes that as soon as the companies start posting earnings growth, the backdrop will help the market reach its next high.
While talking about his most convicted sectors, Lefkowitz noted that he likes secular growth stocks. He elaborated that growth as a sector was hit earlier this year due to doubts regarding AI trends and its ability to generate a return on investment. This has resulted in the sector being at the bottom of the market. However, Lefkowitz believes that the demand for AI products and the sophisticated infrastructure will keep growing for at least the next few years, thereby generating sustainable earnings growth.
Our Methodology
To compile the list of 12 best growth stocks to buy and hold for the long term, we used the Finviz stock screener, Seeking Alpha, and Insider Monkey’s Q4 2024 hedge fund database. Using the screener, we aggregated a list of growth stocks that have grown their sales by at least 30% over the past 5 years. Next, we cross-checked the 5-year sales growth for each stock from Seeking Alpha and ranked the stocks in ascending order of the number of hedge fund investors.
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 373.4% since May 2014, beating its benchmark by 218 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)
5-Year Sales Growth: 36.49%
Number of Hedge Fund Holders: 95
AppLovin Corporation (NASDAQ:APP) is a mobile technology company that provides end-to-end artificial intelligence solutions. The company primarily operates through two main business segments, including the Advertising and Apps segment. Under the Advertising Segment, the company operates a range of platforms, including AppDiscovery, Max, Adjust, and Wurl. On the other hand, through its Apps Segment, the company operates a portfolio of free-to-play mobile games through its own or partner studios.
On May 9, Bank of America Securities analyst Omar Dessouky reiterated a Buy rating and $580 price target on the stock. The analyst based his bullish sentiment on the strong Q1 2025 performance of AppLovin Corporation (NASDAQ:APP), particularly liking the Advertising segment. The segment demonstrated a 78% year-over-year growth to reach $1.158 billion. This led the total revenue of the company to $1.48 billion, reflecting a 40% growth year-over-year. The analyst highlighted that this growth was mainly driven by gaming advertisers and a notable surge in eCommerce revenue, surpassing Bank of America’s estimates.
Dessouky also pointed to AppLovin Corporation’s (NASDAQ:APP) new self-service dashboard, which is expected to accelerate advertiser onboarding and enhance future growth prospects. The company ranks as one of the best growth stocks to buy and hold for the long term.
Carillon Eagle Mid Cap Growth Fund stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q1 2025 investor letter:
“AppLovin Corporation (NASDAQ:APP) is a platform for mobile application developers to grow their apps through user acquisition, monetization, and analytics. The company continued to report healthy growth and provided guidance indicating robust future growth, thanks to the strong reception of its latest tools by existing customers and its expansion into new verticals. However, post-earnings, shareholders became concerned about a short seller’s report questioning data collection practices. Management addressed these issues thoroughly, but lingering questions and general tariff related news impacting the broader market have compounded concerns.”
Overall APP ranks 3rd on our list of the best growth stocks to buy and hold for the long term. 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
