Company Overview - AppLovin (APP) shares increased by 4.5% to $649.59 in the last trading session, with a notable trading volume and a total gain of 48.4% over the past four weeks, driven by investor positioning ahead of its inclusion in the S&P 500 [1] Earnings Expectations - AppLovin is projected to report quarterly earnings of $2.34 per share, reflecting a year-over-year increase of 87.2%. Revenue is expected to reach $1.34 billion, marking an 11.7% rise from the same quarter last year [2] Earnings Estimate Trends - The consensus EPS estimate for AppLovin has remained stable over the last 30 days, indicating that stock price movements may not sustain without changes in earnings estimate revisions. Monitoring AppLovin's performance will be crucial to determine if the recent price increase can lead to further strength [3] Industry Ranking - AppLovin holds a Zacks Rank of 1 (Strong Buy) within the Zacks Technology Services industry, while CoreCard Corporation (CCRD), another company in the same sector, has a Zacks Rank of 3 (Hold) and experienced a 2.2% decline in the last trading session [4][5]

Group 1 - Growth stocks have the potential to generate significant returns for investors, especially turnaround stories, although not all struggling stocks will recover [1] - A $7,000 investment in Palantir Technologies, AppLovin, and Carvana at the beginning of 2023 would yield substantial returns as of September 18 [2] Group 2 - Palantir Technologies has seen its popularity surge among retail investors, driven by enhancements in its AI platform, leading to a quarterly revenue exceeding $1 billion for the first time, with a 48% year-over-year growth [4][5] - The company reported a net income of $326.7 million, a significant turnaround from a net loss of $373.7 million in 2022 [5] - Since the start of 2023, Palantir has generated returns of over 2,600%, making a $7,000 investment worth nearly $193,000, although its valuation is considered inflated with a P/E ratio exceeding 570 [6] Group 3 - AppLovin has outperformed Palantir, leveraging AI to enhance its advertising technology operations, resulting in explosive growth [7] - The company's recent quarterly sales reached $1.3 billion, a 77% increase year-over-year, with earnings soaring by 164% to $820 million [9] - AppLovin's profit margins have improved significantly, and while it trades at around 90 times earnings, its forward P/E is estimated to be a more reasonable 46 [9]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a looming question regarding the energy supply needed to sustain this growth [2] - AI data centers, such as those powering large language models, consume energy equivalent to that of a small city, indicating a significant strain on global power grids [2] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI, making it a unique investment opportunity [3][6] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the onshoring trend due to tariffs [5][6] - It possesses critical nuclear energy infrastructure assets, making it integral to America's future power strategy [7] - The company is noted for its ability to execute large-scale engineering, procurement, and construction projects across various energy sectors, including oil, gas, and renewables [7] Financial Position - The company is completely debt-free and has a significant cash reserve, amounting to nearly one-third of its market capitalization, which positions it favorably compared to other energy firms burdened by debt [8] - It also holds a substantial equity stake in another AI-related company, providing indirect exposure to multiple growth engines in the AI sector [9] Market Sentiment - There is a growing interest from hedge funds in this company, which is considered undervalued and off-the-radar, trading at less than 7 times earnings excluding cash and investments [10][9] - The company is recognized for delivering real cash flows and owning critical infrastructure, making it a compelling investment choice in the context of the AI revolution [11][12]

Group 1 - The S&P 500 serves as a benchmark index for the overall stock market, representing approximately 80% of all U.S. equities by market capitalization [1] - Membership in the S&P 500 requires consistent profits and sufficient stock liquidity, in addition to a large market cap [1][2] - The selection committee regularly evaluates companies, removing those that fail to meet criteria or experience significant value drops, while adding new entrants [2] Group 2 - AppLovin has been added to the S&P 500, replacing MarketAxess, Caesars Entertainment, and Enphase Energy on September 22 [3][8] - AppLovin's stock has increased over 55 times since the beginning of 2023, indicating strong market performance [3] - The company provides an advertising solution that ensures marketers only pay for successful ad placements, utilizing third-party measurement data [5] Group 3 - AppLovin's Axon 2 advertising optimizer, launched in Q1 2023, has significantly boosted its software platform revenue from just over $1 billion in 2022 to $4.25 billion over the last four quarters [6] - The company is diversifying its business by expanding into connected-TV advertising through acquisitions of Wurl and MoPub, and developing an e-commerce advertising engine [7] - AppLovin's advanced algorithms have yielded impressive results for clients, with potential for accelerated growth in 2026 and beyond [8]

Financial Performance - AppLovin's ad tech platform is projected to generate approximately $55 billion in annual sales this year, a 17% increase from $471 billion last year [6] - Fiscal year 2026 sales are projected to climb another 26% to $693 billion [6] - Since the pandemic, AppLovin's top line has grown over 200%, with annual sales at $145 billion in 2020 [6] - Fiscal year 25 EPS revisions have risen 7% in the last 2 months from $844 to $93 [9] - Fiscal year 26 EPS estimates have spiked 12% from $127 to $1355 [9] Market Position and Growth Strategy - AppLovin's stock has rebounded and soared over 100% in the last 6 months and is up 80% year to date [2] - Since going public in April 2021, AppLovin's stock has skyrocketed 800% [2] - AppLovin is positioned as the third-largest ad platform provider in the US, behind Meta Platforms and Alphabet [5] - AppLovin divested its mobile gaming division for $400 million in June to Triple Dot Studios, receiving a 20% equity consideration in Triple Dot [4] - AppLovin's international expansion has dramatically increased its total addressable market and reduced reliance on US gaming revenue [4] Catalysts for Stock Growth - AppLovin's Exxon 20% platform, a machine learning engine for mobile and delivery, has been outperforming business expectations [3] - AppLovin's stock will be added to the S&P 500 next Monday, September 22nd [7] - Several analysts have boosted their price targets for AppLovin to over $640 [7]

Group 1 - ClearBridge Investments reported a strong rebound in U.S. equities during Q2 2025, with the S&P 500 Index returning 10.9% and the Russell 3000 Index advancing 11.0% due to improved risk sentiment following a pause in tariff implementation [1] - The ClearBridge Select Strategy outperformed its benchmark in Q2 2025, benefiting from effective portfolio construction across various companies and sectors with unique growth drivers [1] - AppLovin Corporation (NASDAQ:APP) was highlighted as a key stock, achieving a one-month return of 44.87% and a remarkable 389.24% increase in value over the past 52 weeks, closing at $606.66 per share with a market capitalization of $205.203 billion on September 17, 2025 [2] Group 2 - AppLovin Corporation's Q1 results were exceptional, with ad revenue growing 71% year-over-year, driven by its AI-driven advertising algorithm, particularly in gaming and e-commerce sectors [3] - In Q2 2025, AppLovin Corporation's revenue increased by 77% year-over-year to approximately $1.260 billion, with 109 hedge fund portfolios holding its stock, up from 96 in the previous quarter [4] - Despite the strong performance of AppLovin Corporation, some analysts believe that other AI stocks may offer greater upside potential and lower downside risk [4]

Group 1 - The stock price decreased from $290 to approximately $235, indicating a decline in value since the initial buy coverage [1] - The analyst specializes in individual stock analysis and has a strong educational background in finance and economics, focusing on market trends, particularly in the tech sector [1] - The investment philosophy emphasizes simplicity, suggesting that fundamental financial ratios and metrics provide clearer insights than complex analyses [1] Group 2 - The article is written independently, with no stock or derivative positions held by the analyst in the mentioned companies, and no plans to initiate such positions in the near future [2] - The article expresses the analyst's personal opinions and is not influenced by any business relationships with the companies discussed [2]

Core Viewpoint - The ongoing negotiations regarding TikTok's ownership involve multiple major companies interested in acquiring its US assets from Chinese parent company ByteDance, with a deadline set for December 16 to finalize the sale or face shutdown in the US [1][13]. Group 1: Potential Buyers - A consortium holding 80% of TikTok's US operations would include ByteDance's current shareholders such as Susquehanna International Group (SIG), General Atlantic, and KKR, while ByteDance retains a 19.9% stake [2][13]. - Oracle, valued at over $871 billion, is a key player providing cloud services for TikTok's US operations and is expected to take a stake in the new deal [3][13]. - Amazon, with a market valuation exceeding $2.5 trillion, has made a last-minute offer to acquire TikTok's assets outside of China [4][13]. - A startup led by Tim Stokely, founder of OnlyFans, has partnered with a cryptocurrency foundation to submit a bid for TikTok [5][14]. - AppLovin, a marketing platform valued at $204 billion, has proposed a larger deal that would merge TikTok's global operations outside of China [6][14]. - Perplexity AI has revised its merger proposal to create a new entity combining its operations with TikTok's US segment, suggesting a potential 50% ownership for the US government upon an IPO [8][14]. - Frank McCourt, former owner of the Los Angeles Dodgers, is leading a bid with Reddit co-founder Alexis Ohanian as a strategic adviser [9][10][14]. - A group of investors, including YouTube personality MrBeast, has made an all-cash bid of $30 billion for TikTok's US operations [11][14]. - Microsoft, previously a top bidder in 2020, is also mentioned as a potential acquirer, with a market value of $3.78 trillion [12][14]. Group 2: Strategic Implications - The deal aims to resolve national security concerns raised by the US government regarding TikTok's Chinese ownership, potentially stabilizing the app's operations in the US [1][13]. - The involvement of major tech companies and investment firms indicates a competitive landscape for TikTok's acquisition, highlighting the app's significant user base of approximately 170 million Americans [1][13].

Core Viewpoint - AppLovin has experienced significant stock growth, with a +800% increase since going public in April 2021, driven by strategic moves, financial performance, and market momentum [2][3]. Group 1: Financial Performance - AppLovin's stock has rebounded over +100% in the last six months and is up +80% year to date [1]. - Annual sales are projected to increase by 17% this year to $5.5 billion from $4.71 billion in 2024, with fiscal 2026 sales expected to climb another 26% to $6.93 billion [6]. - The company's top line has grown over 200% since the pandemic, with annual sales reaching $1.45 billion in 2020 [8]. Group 2: Strategic Moves - AppLovin divested its mobile gaming division for $400 million in June, allowing the company to focus on its high-growth ad tech platform [5]. - The AXON 2.0 platform, a machine learning engine for mobile ad delivery, has been a key driver of optimism, optimizing advertisers' reach and engagement [3][4]. Group 3: Market Position and Expansion - AppLovin is now the third-largest ad platform provider in the U.S., following Meta Platforms and Alphabet [5]. - The company is expanding its ad tech globally, targeting markets in Europe and Asia, which has increased its total addressable market and reduced reliance on U.S. gaming revenue [4]. Group 4: Analyst Sentiment and Stock Inclusion - AppLovin's stock will be added to the S&P 500, boosting investor sentiment and institutional credibility [9]. - Analysts have raised their price targets for AppLovin to over $640, reflecting a bullish stance on its AI-powered mobile ad-tech platform [9]. - Earnings estimate revisions for FY25 and FY26 have increased, with FY25 estimates rising 7% and FY26 estimates spiking 12% [10].

Core Insights - A potential Federal Reserve rate cut, strong retail sales, and progress in U.S.-China trade talks may positively impact the broader stock market, but not all stocks are guaranteed to perform well. Investors are advised to use the Driehaus strategy to identify the best momentum stocks [1] Group 1: Driehaus Strategy Overview - The Driehaus strategy emphasizes investing in stocks that are increasing in price rather than those in decline, focusing on strong earnings growth and positive momentum indicators [3][5] - Key criteria for the Driehaus strategy include a positive percentage 50-day moving average and strong earnings growth rates, with a focus on companies that consistently beat earnings estimates [4][5] Group 2: Selected Momentum Stocks - AppLovin Corporation (APP), Build-A-Bear Workshop, Inc. (BBW), and Tenet Healthcare Corporation (THC) have been identified as momentum picks based on the Driehaus strategy [2][8] - AppLovin has a Momentum Score of B and an average trailing four-quarter earnings surprise of 22.4% [10] - Build-A-Bear Workshop also has a Momentum Score of B, with an average trailing four-quarter earnings surprise of 21.3% [11] - Tenet Healthcare, with a Momentum Score of B, boasts an average trailing four-quarter earnings surprise of 31.2% [12]