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Does AppLovin (APP) Have a Promising Market Potential?

ClearBridge Investments, an investment management company, released its “ClearBridge Select Strategy” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The positive momentum in 2023 continued in the first quarter of 2024, the stocks surged on the expectation of a soft landing of the economy and a slowdown in rate hikes by the Fed. Against this backdrop, the S&P Index surged 10.56% and the Russell 3000 Index gained 10.02%. The strategy underperformed its Russell 3000 Index benchmark in the quarter. IT and industrial sectors were the primary contributors while the real estate sector detracted. In addition, please check the fund’s top five holdings to know its best picks in 2024.

ClearBridge Select Strategy highlighted stocks like AppLovin Corporation (NASDAQ:APP), in the first quarter 2024 investor letter. AppLovin Corporation (NASDAQ:APP) develops a software-based platform for advertisers to enhance the marketing and monetization of their content. The one-month return of AppLovin Corporation (NASDAQ:APP) was -4.35%, and its shares gained 224.84% of their value over the last 52 weeks. On June 21, 2024, AppLovin Corporation (NASDAQ:APP) stock closed at $78.58 per share with a market capitalization of $25.854 billion.

ClearBridge Select Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its first quarter 2024 investor letter:

"We also added AppLovin Corporation (NASDAQ:APP), a disruptor in the IT sector that helps developers market and monetize their mobile apps. Powered by its proprietary targeting engine, the company’s software segment grew robustly in 2023 and should benefit from improving AI efficiency. We believe growth of the company’s targeting engine is still in the early innings as precision continues to improve, its adoption and dataset grow and AppLovin starts to license the engine to e-commerce advertisers, which could open up a brand new multibillion dollar market."

A programmer typing code into a computer, to develop web-based media applications.

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AppLovin Corporation (NASDAQ:APP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the first quarter which was 38 in the previous quarter. AppLovin Corporation (NASDAQ:APP) reported solid results in the first quarter, with total revenue of $1.06 billion, up nearly 50% over the prior year period. While we acknowledge the potential of AppLovin Corporation (NASDAQ:APP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed AppLovin Corporation (NASDAQ:APP) and shared the list of best fast growth stocks to buy. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.