We recently published a list of 10 Latest AI News You Shouldn’t Miss. In this article, we are going to take a look at where Applovin Corporation (NASDAQ:APP) stands against other latest AI news you shouldn’t miss.
Anastasia Amoroso, iCapital chief investment officer, said in a latest program on CNBC that 2025 will be the year of AI software, data centers and power. She believes the AI rally is broadening out.
“Artificial intelligence, as I mentioned, is carrying itself over into 2025, and I think it’s broadening. Last year, last two years, have been about semiconductors. I think this year has to be about AI software; it has to be about AI monetization, but it also has to be about AI power. And it’s not just, you know, a number of headlines talking about data centers and how much they consume, and the fact that I think you need eight times the electricity to run an AI data center. It’s an actual real trend, which I also think the Trump Administration is going to support as well.”
The analyst also said investors should consider alternative investments or private markets as she believes private equity valuations are below the levels seen in public markets.
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For this article we picked 10 AI stocks trending on latest news. With each stock we have mentioned 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 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)
Number of Hedge Fund Investors: 51
Jim Cramer in a latest program on CNBC said Applovin Corporation (NASDAQ:APP) is overvalued and warned investors to be cautious about the stock:
“I think this may be incredibly overvalued, and you can’t short it—there’s too many people betting against it. But this is mobile game ad placement, and I think anyone can come into this. I think there actually know people who are coming into it.
And it’s one of those stories, David, where they big margin. So you came in with anything smaller, you know, any lower price, you could obliterate them. Now, they would say, “Look, we are so entrenched.” I say, “Give me a break.”
I mean, I know that you do have earnings. They do have earnings—they could earned 350. But I just think a stock that started the year at a fraction of where it ended, at $39 to 323, is a stock that you ought to think twice about.”
Alta Fox Capital stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q3 2024 investor letter:
“Alta Fox has followed AppLovin Corporation (NASDAQ:APP) since its IPO in 2021, watching its initial high valuation (>30x EBITDA) through the mobile gaming downturn in 2022, failed Ironsource bid), and its consistent share gains from Unity/Ironsource. After years of diligence and consistent admiration for APP’s adtech revenues, we gained conviction in Applovin’s data-driven competitive advantage and initiated a position this summer.
We purchased shares at~11x NTM EBITDA, an attractive price relative to APP’s growth and quality compared to similar adtech peers. The entry price also appeared inexpensive relative to APP’s own historical valuation, which averaged -20x EBITDA. We felt confident in underwriting mid-teens revenue growth and modest operating leverage over the medium-term. Without any multiple expansion, we expected to earn a low-20%s IRR in the stock-an attractive return for owning such a dominant, secular growth business.
As the year progressed, the market increasingly rewarded APP for its quality & growth, nearly doubling its forward EBITDA multiple from our cost basis. With the valuation nearing 20x EBITDA, we no longer saw a sufficient margin of safety and exited our position at roughly 2x our cost basis.”
Overall, APP ranks 10th on our list of the latest AI news you shouldn’t miss. While we acknowledge the potential of APP, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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.
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Disclosure: None. This article is originally published at Insider Monkey.
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