We recently published a list of 15 High Growth Companies Hedge Funds Are Buying. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against other high growth stocks.
The global economy in 2025 is expected to face modest growth amid ongoing challenges, with projections for US GDP at 2%, the Eurozone at 0.9%, and China at 4.2%. Inflation is likely to remain high because of increasing fiscal spending and potential tariffs, and central banks may have limited room to cut rates, leading to uncertain markets and possible volatility. However, rising productivity driven by AI and other emerging technologies offers long-term promise. The US is expected to benefit the most from these gains, while Europe may lag behind due to slower investment and tech adoption.
According to Deutsche Bank Wealth Management, policy is shifting from monetary to fiscal, with countries like China expected to launch growth initiatives. Equities, particularly American stocks, are favored by investors, supported by profit growth and favorable policy expectations. Bond markets and commodities also offer opportunities, and infrastructure investment is considered a long-term growth area. Similarly, despite the current market uncertainty, BlackRock believes there is reason to stay optimistic about developed market stocks in the next 6 to 12 months. American Treasuries, which used to act as a safety net when stocks dropped, have not offered the same protection lately. In addition, the dollar lost ground in recent selloffs, which is unusual. As a result, some investors are turning to alternatives like gold, which has hit record highs. The rise of AI is also reshaping the market, creating more concentration in a few big tech names. That can strengthen returns, but it also raises risks. Private capital is in demand too, though higher interest rates may weigh on future returns there.
As markets get more unpredictable, many investors are starting to follow hedge funds, hoping they can repeat last year’s strong returns and stay ahead of the curve. In 2024, hedge funds posted remarkable performance, leveraging the volatility and policy shifts in the markets. The average return through November was 10.7%, which is a significant improvement over the 5.7% return for the same period in 2023. This uptick was supported by market turbulence, changes in central bank policies, and the uncertainty surrounding the American presidential election. Notably, some hedge funds saw spectacular gains, such as Light Street Capital’s long/short tech fund skyrocketing 59.4%, while Discovery Capital, a macro-focused fund, posted a 52% return. Bridgewater's Pure Alpha fund gained 11%, and Marshall Wace, a major British hedge fund, saw impressive returns across several of its funds, including a 14% return in its Eureka fund. Multi-strategy funds like Citadel and Millennium also performed well.
Is AppLovin Corporation (APP) Among The High Growth Companies Hedge Funds Are Buying?
A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.
Our Methodology
For this article, we used the Finviz screener and filtered out stocks with 5-year revenue growth of over 20%, verifying this information from additional sources. We picked the 15 stocks with the highest hedge fund sentiment to compile this list, taking data from Insider Monkey's database of Q4 2024. We ranked the list from least to most hedge fund holders.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
AppLovin Corporation (NASDAQ:APP) helps advertisers and app developers grow through its marketing and monetization platform. It offers tools like AppDiscovery, MAX, and Adjust for ad optimization and analytics, and owns Wurl for connected TV advertising. AppLovin Corporation (NASDAQ:APP) ranks 8th on our list of the high growth stocks most popular among smart investors.
On April 11, UBS analyst Chris Kuntarich reiterated a Buy rating on APP but slashed the price target from $630 to $450. UBS sees improving investor sentiment around AppLovin despite recent short report concerns. The firm expects Q1 e-commerce revenue at $90 million, below market forecasts, but remains optimistic about long-term growth.
AppLovin Corporation (NASDAQ:APP)'s Q4 2024 revenue hit $1.37 billion, a 44% increase from the previous year, while full-year revenue grew 43% to $4.71 billion. The big driver was advertising, which saw a 73% jump, though app revenue dipped a little. Net income rose by 248% in Q4 and 343% for the whole year. The company also repurchased 25.7 million shares in 2024, leaving 340 million shares outstanding. For Q1 2025, APP expects revenue of up to $1.385 billion.
According to Insider Monkey’s Q4 data, 95 hedge funds held stakes in AppLovin Corporation (NASDAQ:APP), compared to 51 funds in the last quarter. Rajiv Jain’s GQG Partners was the largest stakeholder of the company, with 8.4 million shares valued at $2.7 billion.
Overall, APP ranks 8th among the high growth companies hedge funds are buying. While we acknowledge the potential of 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 time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than APP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
