What Makes AppLovin (APP) an AI Winner?

Bristlemoon Capital, a global equities firm, released its “Bristlemoon Global Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned -6.2% in the December quarter and a 0.3% return in December. Since its inception, the fund has produced a cumulative return of 11.9%, net of fees.  In 2025, market trends intensified, with perceived AI winners rallying, while stocks considered "cheap" dropped even further if labeled as AI losers. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Bristlemoon Global Fund highlighted AppLovin Corporation's (NASDAQ:APP) strong performance. AppLovin Corporation (NASDAQ:APP) is a technology company that develops software-based platforms for advertisers to enhance the marketing and monetization of their content. The one-month return of AppLovin Corporation (NASDAQ:APP) was -4.06%, and its shares gained 105.18% of their value over the last 52 weeks. On January 9, 2026, AppLovin Corporation (NASDAQ:APP) stock closed at $647.72 per share, with a market capitalization of $219.091 billion.

Bristlemoon Global Fund stated the following regarding AppLovin Corporation (NASDAQ:APP) in its fourth quarter 2025 investor letter:

"The Fund has benefitted from the strong performance of a number of AI winners. For example, AppLovin Corporation (NASDAQ:APP) has been applying machine learning to improve its ad algorithms, and to great effect. The company’s Software Platform revenues and adjusted EBITDA on a last twelve month basis are up 72% and 89% year-over-year, respectively. In the 16 months since we first bought AppLovin, the stock has increased in value by more than 10x. We mapped out our bullish AppLovin thesis in our September 2024 quarterly letter before the market appreciated the company’s ability to sustain its explosive growth."

AppLovin Corporation (NASDAQ:APP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 110 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the third quarter, which was 109 in the previous quarter. In Q3 2025, AppLovin Corporation’s (NASDAQ:APP) revenue increased 68% from last year to approximately $1.405 billion. While we acknowledge the potential of AppLovin Corporation (NASDAQ:APP) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered AppLovin Corporation (NASDAQ:APP) and shared the list of most favored communication services stocks according to hedge funds. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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