There are still attractively valued tech stocks despite the market's strong performance this year.It's been a strong year for the stock market and with the Federal Reserve beginning to cut rates as part of a normalization cycle, the good times are likely to continue. Tech stocks in particular have helped lead the way, as artificial intelligence (AI) is driving a lot of momentum in the market. Despite the market's strong run, there are still a number of attractively valued tech stocks that look like good inv ...

The AI-powered Adtech leader may just be getting started.AppLovin (APP 1.02%) stock has swept investors off their feet with a spectacular 265% return this year. The mobile advertising technology (adtech) disrupter is benefiting from new artificial intelligence (AI) features integrated across its platform that have added to a strong growth outlook.Following such a big rally in the share price, investors may be wondering if there is more upside ahead or whether this is the one that got away. Here's what you n ...

These stocks are up big, but that doesn't mean that they can't go up even more.Way back in 2016, before most investors were even aware of artificial intelligence (AI), Nvidia (NVDA 1.63%) co-founder Jensen Huang delivered an AI supercomputer to leadership at OpenAI. In 2022, OpenAI released the popular ChatGPT chatbot, sparking a generative AI revolution. And now the tailwinds couldn't be blowing any harder in Nvidia's sails.Returns for Nvidia stock over the past five years have been sensational, with the s ...

The most recent trading session ended with AppLovin (APP) standing at $143.40, reflecting a -0.08% shift from the previouse trading day's closing. The stock trailed the S&P 500, which registered a daily gain of 0.71%. Elsewhere, the Dow saw an upswing of 1.03%, while the tech-heavy Nasdaq appreciated by 0.6%. Shares of the mobile app technology company have appreciated by 66.43% over the course of the past month, outperforming the Business Services sector's gain of 5.54% and the S&P 500's gain of 6.41%. The ...

Economic Environment - Wall Street anticipates further cuts in the Fed's benchmark lending rate, with a 100% probability of a 25-basis point cut in November and a total year-to-date cut of 1% by December [1] - The current Fed fund rate is between 4.75-5%, following a significant cut of 50 basis points in September, marking the first reduction since March 2020 [1] Growth Stocks - Investment in growth stocks is expected to be fruitful, with five highlighted stocks: AppLovin Corp. (APP), Duolingo Inc. (DUOL), Paramount Global (PARAA), Twilio Inc. (TWLO), and Catalent Inc. (CTLT) [2] - Growth investors focus on stocks with aggressive earnings or revenue growth, which are likely to see stock price increases due to reduced production costs from rate cuts [2] AppLovin Corp. (APP) - AppLovin reported a 76% year-over-year revenue increase in 2023 and a 44% year-over-year revenue jump in Q2 2024, alongside a 286% increase in net income [4] - The company has an expected revenue growth rate of 35.2% and earnings growth rate of over 100% for the current year, with positive earnings estimate revisions in the last 60 days [5] Duolingo Inc. (DUOL) - Duolingo operates a mobile learning platform offering courses in 40 languages and has seen an expected revenue growth rate of 38.6% and earnings growth rate of over 100% for the current year [7][8] - Positive earnings estimate revisions have occurred for the current quarter and next year in the last 30 days [8] Paramount Global (PARAA) - Paramount Global operates in media, streaming, and entertainment, with an expected earnings growth rate of over 100% for the current year, despite a negative revenue growth rate [10][12] - The Zacks Consensus Estimate for earnings has improved over the last 60 days [12] Twilio Inc. (TWLO) - Twilio is benefiting from digital transformations and has an expected revenue growth rate of 5.2% and earnings growth rate of 39.2% for the current year [14][15] - The company has seen improvements in earnings estimates over the last 60 days [15] Catalent Inc. (CTLT) - Catalent's impending buyout by Novo Holdings is expected to enhance its business investments, with a projected revenue growth rate of 8.1% and earnings growth rate of over 100% for the current year [17][18] - The company reported nearly 30% growth in non-COVID revenues during the fourth quarter of fiscal 2024 [17]

Investment Rating - The report initiates coverage on AppLovin (APP.US) with a "Buy" rating and a target price of $148, implying a potential upside of 16% [2][3] Core Views - AppLovin is a leading player in the mobile advertising industry with a comprehensive ecosystem, driven by its AI-powered advertising engine AXON 2.0, which has significantly boosted its growth [2] - The company is expanding beyond gaming into e-commerce and connected TV (CTV) advertising, which could further enhance its market potential [2] - AppLovin's software platform business benefits from low marginal costs and high operating leverage, with a 73% adjusted EBITDA margin in 2Q24 [2] Industry Overview - The global in-app advertising (IAA) market is expected to reach $352.7 billion in 2024, accounting for over 40% of digital ad revenue, with a CAGR of 9% from 2024 to 2028 [10] - The in-game advertising (IGA) market is projected to grow to $109.6 billion in 2024, with a CAGR of 9.5% from 2024 to 2028 [10] - Regulatory changes, such as the EU's Digital Markets Act (DMA) and privacy policies like Apple's ATT, are reshaping the mobile advertising landscape, creating opportunities for more flexible and adaptive ad tech companies [12][13] Company Analysis AI-Driven Growth - AppLovin's AI advertising engine, AXON 2.0, has driven a 75% YoY growth in ad revenue in 2Q24, with the company expecting over 20% annual growth in ad revenue in the coming years [2] - The company's AI capabilities are supported by its extensive data and technological expertise, which enhance its competitive advantage [20] Expansion into Non-Gaming Sectors - AppLovin is focusing on e-commerce as a key growth area, with successful tests in e-commerce advertising and plans to scale up investments in this sector [2][32] - The company is also exploring opportunities in CTV advertising through its acquisition of Wurl, aiming to leverage AXON 2.0's capabilities in this space [34] Financial Performance - AppLovin's software platform business has a high adjusted EBITDA margin of 73% in 2Q24, with 81% of incremental revenue converting to adjusted EBITDA [36] - The company's free cash flow to adjusted EBITDA ratio stands at 74%, reflecting strong cash generation capabilities [36] Valuation - The report values AppLovin's software platform business at 20x FY25E EV/EBITDA and its apps business at 5x FY25E EV/EBITDA, resulting in a target price of $148 [41][42] Competitive Landscape - AppLovin's AppDiscovery platform is a leading user acquisition tool in the mobile gaming market, ranking second in Android and first in iOS [22] - MAX, AppLovin's monetization solution, is the largest mediation platform in mobile gaming, with a 2/3 market share [24] - Adjust, the company's attribution platform, ranks second in market share, providing valuable insights for optimizing ad campaigns [26]

Core Viewpoint - AppLovin Corporation (APP) demonstrates strong growth potential and operational efficiency, making it a compelling investment opportunity despite recent stock price increases [4][11]. Financial Performance - In 2023, AppLovin reported a 76% year-over-year revenue growth and a 41% increase in EBITDA [4]. - For the second quarter of 2024, the company achieved a 44% year-over-year revenue increase and a 286% rise in net income [4]. - The Zacks Consensus Estimate for AppLovin's 2024 revenues is $4.4 billion, indicating a 35.2% growth from the previous year [9]. - The earnings estimate for 2024 is projected at $3.5 per share, reflecting a 253.1% increase from the prior year [9]. Growth Strategy - AppLovin is expanding its software business into new verticals beyond gaming, including a pilot program for e-commerce shops to purchase in-app mobile game video ad inventory [5][6]. - Management anticipates a 20-30% growth in its software business in the long term, independent of gaming vertical expansion [6]. Liquidity Position - The company's current ratio stands at 2.28, significantly higher than the industry average of 0.92, indicating strong liquidity and the ability to meet short-term obligations [7]. Analyst Confidence - In the past 60 days, six earnings estimates for 2024 have been revised upward, reflecting strong analyst confidence in AppLovin's financial performance [10]. - For 2025, six estimates have also moved upward, indicating continued positive sentiment among analysts [10]. Investment Outlook - AppLovin's robust liquidity, strong revenue and earnings growth expectations, and successful expansion into new verticals present a strong buying opportunity for investors [11]. - Despite significant year-to-date gains, the current valuation suggests potential for further appreciation, supporting the case for investment at current levels [11].

AppLovin Corporation's stock (NASDAQ: APP ) is soaring with a 232% rally over the last twelve months. The explanation is the company's soaring revenue after the company started incorporating AI capabilities to its software for digitalComing from an IT background, I have dived into the U.S. stock market seven years ago by managing portfolio of my family. Starting managing real money has been challenging for the first time, but long hours of mastering fundamental analysis of public companies paid off and now ...

Group 1 - AppLovin (APP) has shown significant stock price increases, which may lead to investor caution [1] - Despite potential risks, AppLovin demonstrates profitable growth that could continue for several years [1]

Group 1 - The individual has over 30 years of experience as a Merchant Seaman and has developed a strong interest in investing over the last 15 years [1] - The individual has learned a significant amount about investing from The MF and has a background in engineering, leading to a focus on Tech stocks [1] Group 2 - There is no stock, option, or similar derivative position held in any of the companies mentioned, nor are there plans to initiate any positions within the next 72 hours [2] - The article expresses personal opinions and is not receiving compensation from any company mentioned [2]