META - AppLovin's AI Tailwinds Are Still Not Getting The Love They Should

2024-04-08 07:42:19 ET

Summary

• AppLovin has experienced significant growth by pivoting to the digital ad business and diversifying into the CTV ad market.
• The company's Software Platform business, driven by AI-powered products, has been a key driver of revenue growth.
• The improving macro outlook for ad spending, including CTV, is expected to further boost AppLovin's growth prospects.
• My models suggest there is still 14% upside despite the impressive run-up so far this year.

Investment Thesis

In my view, AppLovin ( APP ) is the poster child of ‘having struck a pot of gold’. The company has seen phenomenal growth in its business once again as it used its backend technology to pivot to the faster growing digital ad business in general, allowing it some exposure to the rapidly expanding CTV ad market and diversifying away from its volatile mobile ad market....

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