Billionaire investor Israel Englander, the mastermind behind Millennium Management, has made a bold move in the stock market. While Nvidia (NASDAQ:NVDA) has been a dominant force in artificial intelligence (AI) technology, Englander has chosen to trim his position in the semiconductor giant and redirect his focus elsewhere. His new bet? AppLovin stock (NASDAQ:APP).
As AI-driven advertising technology gains momentum, Englander has aggressively increased his stake in APP, adding over 800,000 shares. This move has catapulted the company into Millennium’s top 20 holdings. But what makes AppLovin such an attractive investment? Let’s take a closer look.
AppLovin’s AI-Powered Ad Tech Business
Founded in 2011, AppLovin (NASDAQ:APP) has transitioned from a mobile gaming company to a leader in AI-driven advertising technology. The company’s Axon platform uses machine learning to optimize digital advertising campaigns, making them more efficient and profitable.
AppLovin’s technology has driven rapid growth, helping it reach a market cap of over $100 billion. The company’s MAX advertising platform has revolutionized the way mobile developers and advertisers interact, providing a seamless marketplace for ad placements.
Despite concerns raised by short-sellers, APP stock has demonstrated impressive resilience. Over the past year, shares have surged more than 450%, with the company consistently beating earnings expectations.
AppLovin’s Blowout Q4 Earnings
AppLovin’s fourth-quarter earnings report crushed analyst expectations:
Revenue: $1.4 billion (up 44% year-over-year)
Ad revenue: $999.5 million (up 73%)
Earnings per share (EPS): $1.73 (beating estimates by 35.2%)
Adjusted EBITDA: Up 78%
CFO Matt Stumpf credited this performance to strong mobile gaming ad revenue and growing e-commerce demand during the holiday season. With the company now focusing solely on its high-growth AI-powered ad business, its financial outlook remains strong.
Why Englander Prefers APP Over NVDA
While Nvidia stock (NASDAQ:NVDA) remains a dominant force in AI, its valuation has become a concern for some investors. After rallying over 400% in two years, the stock may face increased volatility as competition in the AI semiconductor space intensifies.
On the other hand, APP stock offers a high-growth opportunity in the booming digital advertising sector. With AI-driven ad technology still in its early stages, investors see significant upside potential.
Wall Street’s Take on APP
Analysts remain bullish on AppLovin stock, even amid short-seller concerns. Some key ratings include:
Bank of America: Reaffirms APP as a “top pick,” with a $580 price target.
Loop Capital: Raised its price target to a Street-high $650, expecting nearly 100% upside.
Consensus rating: “Strong Buy” from 15 of 19 analysts.
AppLovin’s CEO has also dismissed fraud allegations, highlighting the company’s compliance safeguards and third-party audits.
Final Thoughts
Israel Englander’s decision to trim his Nvidia stock holdings and bet big on APP stock signals confidence in the company’s long-term growth. With AI-powered advertising becoming a major industry trend, AppLovin’s innovative technology and strong financial performance could make it one of the most compelling investment opportunities in 2025.
The Road Ahead for AppLovin Stock
As AppLovin stock (NASDAQ:APP) continues to navigate both growth opportunities and market skepticism, investors are closely watching the company’s next moves. The recent decision to sell its gaming studios for $900 million signals a strategic shift toward pure-play AI-driven advertising, allowing AppLovin to double down on its most profitable segment.
Looking ahead, management expects Q1 2025 revenue to land between $1.355 billion and $1.385 billion, with ad revenue surpassing $1 billion. This suggests that the company is still in the early stages of fully capitalizing on its AI technology.
With the digital advertising industry projected to grow rapidly, AppLovin’s AI-powered ad solutions could continue to drive its valuation higher. If Englander’s bet pays off, AppLovin stock may not only maintain its strong momentum but also emerge as one of the defining AI success stories of the decade. For investors seeking high-growth AI stocks, APP remains a compelling option.
Featured Image: DepositPhotos @ Sashk0
