Jim Cramer on AppLovin: “It Is a Very Fine Business, By the Way, With Fantastic Growth, Impressive Profitability”

AppLovin Corporation (NASDAQ:APP) is among the stocks in focus as Jim Cramer reviewed the S&P 500’s top performers and the Nasdaq 100’s biggest laggards for the first quarter. Cramer explained why the stock fell off despite it being a good business. The Mad Money host commented:

Second-worst performer, wow, much-loved company AppLovin, down almost 41%. This is a former market darling, which helps mobile game developers and other digital businesses to grow their reach and monetize their platforms through advertising. Had the business to itself. It’s honestly, it is a very fine business, by the way, with fantastic growth, impressive profitability. But the stock got really expensive. Entering this year, it was selling for more than 45 times earnings. That left the stock of AppLovin very vulnerable. If your stock has a high multiple and there’s even a whiff of concern that it could be displaced by AI, then investors will sell first and ask questions later.

A laptop and a computer monitor display a detailed stock market technical analysis chart. Photo by Jakub Zerdzicki on Pexels

AppLovin Corporation (NASDAQ:APP) provides a software platform that helps advertisers and app developers market and monetize their content. The company offers advertising solutions, analytics tools, connected TV services, and mobile games.

While we acknowledge the risk and 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 time frame. If you are looking for an AI stock that is more promising than APP and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

Disclosure: None. Follow Insider Monkey on Google News.