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 Perion Network Ltd. (NASDAQ:PERI) 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 busy web page, representing the creative platform solutions of the digital advertising solutions company.
Perion Network Ltd. (NASDAQ:PERI)
Number of Hedge Fund Holders: 21
Perion Network Ltd. (NASDAQ:PERI) offers digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. Wall Street believes that Microsoft Bing’s pullback on Perion Network Ltd. (NASDAQ:PERI)’s business operations has impacted its revenue outlook, which has impacted its stock price. The company’s stock saw a decline of over ~60% on a YTD basis. Also, the company’s advertising segment has been exposed to broader challenges, with Perion Network Ltd. (NASDAQ:PERI) experiencing a slump in demand for both video and display advertising.
That being said, Perion Network Ltd. (NASDAQ:PERI) now targets to help CMOs (Chief Marketing Officers), the people who control ~$700 billion of digital advertising budgets. The company expects this number to reach ~$1 trillion in the next 3 years. Since these CMOs are required to provide continuous ROI on advertising budgets, Perion Network Ltd. (NASDAQ:PERI)’s AI-driven technologies should be a standout. Its AI-driven solutions focus on streamlining the fragmented advertising ecosystem, laying emphasis on connected TV, digital out-of-home, and retail media.
Perion Network Ltd. (NASDAQ:PERI) aims to maintain positive cash flow and plans to continue making investments in technology. It expects advertising revenue growth to resume in Q1 2025 with gradual improvement throughout the year. Less than a year ago, the company launched its advanced Generative AI solution for audio ads. It is now expanding into audio advertising, with partnerships including Spotify and iHeart.
Overall, PERI ranks 6th on our list of best AdTech stocks to buy according to hedge funds. While we acknowledge the potential of PERI 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 PERI 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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