The Motley Foolยท2025-10-03 08:44Core Investment Thesis - The artificial intelligence (AI) sector is currently viewed as a highly promising investment area, particularly following the launch of ChatGPT by OpenAI in late 2022, which has contributed to strong stock market momentum [1] Company Summaries AppLovin - AppLovin specializes in software and AI solutions for mobile advertising, marketing, and analytics, with products like AppDiscovery, MAX, and Adjust [3] - The company has seen its stock price increase by over 120% in 2025, and its revenue surged 77% year over year in Q2 2025 to approximately $1.3 billion, while net income rose 164% to $820 million [4] - Despite this growth, Wall Street's average 12-month price target for AppLovin is about 18% below its current share price, indicating skepticism about future momentum [4] CoreWeave - CoreWeave, an AI hyperscaler, went public on March 28, 2025, and operates a cloud platform tailored for generative AI applications, with Nvidia as a significant partner and investor [5] - The stock has increased by over 240% since its IPO, and revenue more than tripled year over year in Q2 2025 [6] - Although currently unprofitable due to heavy investments in AI infrastructure, analysts are cautious about its stock performance, although a recent $14 billion deal with Meta may change outlooks [6] Nebius Group - Nebius Group has experienced a remarkable stock increase of over 400% year to date, positioning it as a leading AI hyperscaler [7] - The company, which rebranded from Yandex after divesting its Russian assets, reported a staggering 625% year-over-year revenue growth in Q2 2025 [8] - Nebius operates multiple subsidiaries, including Avride for autonomous driving technology and TripleTen for skill improvement in tech workers, and has received a consensus 12-month price target reflecting a 36% upside potential, with most analysts recommending it as a "buy" or "strong buy" [9][11]