AppLovin’s rise has been nothing short of impressive, but as its value continues to climb, you may be wondering if now’s the time to jump on the bandwagon—or if it’s too risky. Let’s break it down.

The Surprising Winner of 2024

Imagine you’re asked: which US tech stock had the best performance in 2024 on Nasdaq? If you guessed Nvidia or Palantir, you’d be off the mark.

Despite impressive gains (Nvidia up 177%, Palantir soaring 341%), they were not the top performers.

Instead, it was AppLovin, a relatively unknown software company, that stole the show with a massive 713% gain.

In fact, AppLovin’s growth has been so significant that if it were listed in the UK, it would be the fourth-largest company on the FTSE 100, right ahead of major players like Unilever, BP, and GSK.

What Is AppLovin?

So, what exactly does AppLovin do, and why are investors so drawn to it? Headquartered in Palo Alto, California, AppLovin was founded in 2011 by Adam Foroughi, a former derivatives trader.

The company originally aimed to connect advertisers with mobile game developers to help them monetize their games through ads.

At the time, mobile gaming was just beginning to take off, and the idea seemed ahead of its time.

In 2018, AppLovin secured a significant investment from Wall Street’s KKR, leading to rapid growth and acquisitions of several mobile gaming studios.

By 2021, it went public, riding the wave of increased interest in gaming during the COVID-19 pandemic.

Fast forward to 2023, and AppLovin had not only expanded its game library but also enhanced its ad-tech capabilities with an advanced AI-driven ad platform called Axon, which competes with tech giants like Google.

AppLovin’s Explosive Growth

AppLovin has evolved into a dominant player in the ad-tech industry, with more than 1.4 billion active daily users.

Its recent financial results were stellar: a 43% increase in sales, reaching $4.7 billion, and a quadrupling of its net profit to $1.6 billion.

The company has also made significant strides in e-commerce advertising, with potential interest from major players like Amazon and Walmart.

AppLovin’s success is largely attributed to its ability to monetize mobile gaming in a way that few others have managed to do, and the AI-driven approach seems to be paying off.

Is Now the Time to Buy?

The big question on many investors’ minds is: should you buy AppLovin shares, or is it too risky? There’s no denying that the company’s shares have been on an impressive upward trajectory, but as with all tech stocks, there’s always the risk that they could fall just as quickly.

The fact that these are US-based shares also means the value of your investment could be impacted by currency fluctuations.

If you want to spread your risk, one option is to invest in AppLovin through a UK-based investment fund.

Some firms, like Baillie Gifford, have already made a significant bet on AppLovin, with a stake now worth billions.

The company’s growth potential is still strong, but investing in individual tech stocks is not for the faint-hearted.

Investing in AppLovin Through Funds

If you’re not comfortable picking individual stocks, you might consider investing through a fund.

Funds like Polar Technology Investment Trust or Baillie Gifford’s Global Alpha Fund hold shares in AppLovin, and this approach can help reduce the risk associated with individual investments.

DIY Investing Platforms

If you’re looking to go it alone and invest directly in AppLovin, there are plenty of online platforms that allow you to do so.

Platforms like Hargreaves Lansdown, AJ Bell, and Interactive Investor all offer access to US stocks, but it’s essential to compare the services, fees, and other costs before deciding on the right one for you.

Each platform has its own strengths, whether that’s low trading fees, access to a wide range of stocks, or ease of use.

For instance, AJ Bell has a monthly platform fee but offers a range of investment options, while Freetrade offers a straightforward, low-cost model for those just starting out.

Conclusion: Take Caution or Dive In?

AppLovin is a high-flying tech stock, and while its growth has been remarkable, it’s crucial to understand the risks involved.

The company’s strong financials and innovative approach to mobile advertising give it plenty of potential for further growth, but the market can be volatile, especially in tech.

If you’re unsure, it might be worth exploring safer options like funds or speaking to a financial advisor before diving in.

The rise of AppLovin is a clear example of how rapidly tech stocks can grow, but the big question is: will it keep soaring, or is this the peak?

This article was published on TDPel Media. Thanks for reading!

Share on Facebook «||» Share on Twitter «||» Share on Reddit «||» Share on LinkedIn