Is Applovin Corp. (APP) One of the Best Technology Stocks to Buy for Long-Term Investment?

We recently published a list of the 13 Best Technology Stocks to Buy for Long-Term Investment. In this article, we are going to take a look at where Applovin Corporation (NASDAQ:APP)  stands against other tech stocks to buy for long-term investment.

On May 12, Jeff Kilburg of KKM Financial and Dan Ives of Wedbush Securities appeared together on CNBC to discuss AI, cybersecurity, and mega-cap tech, especially as tech stocks soar as the US-China tariff deal boosts market confidence. Jeff Kilburg first identified the tech software sector as the primary beneficiary of the recent market pause amid optimism and gains, and highlighted that markets are broadly positive. He noted that many investors underestimated how quickly a China trade deal would materialize and contrasted it with the UK deal, which was expected to be a slower, tentative template. Kilburg suggests that faster deal-making could continue and benefit several software companies, which have been overlooked due to the focus on the MAG7. Dan Ives concurred with Kilburg’s view but singled out NVIDIA as the biggest near-to-medium-term beneficiary of the pause, especially given its prior exposure to China tariffs. He referenced the ongoing AI revolution and the surge in AI-related stocks and described the current environment as a dream scenario for tech investors. Ives anticipates new highs for tech and the broader market. He also described a ‘golden age’ for cybersecurity stocks, which are acting as secondary beneficiaries of AI growth.

On a question about the impact of the admin’s focus on reducing federal spending and debt, particularly on companies that derive substantial revenue from government contracts, Kilburg responded that this fiscal discipline is actually positive for software companies as it may drive more spending toward efficient software solutions. Kilburg also addressed the sectors to avoid or be cautious about amid the current market environment. He suggests trimming utilities, which have been a safe haven but may now be less attractive. He points out that the VIX volatility index dropping below 20, which is a big change from over 60 in April, indicates reduced market fear and increased investor confidence. This suggests a market environment favoring higher-beta and growth-oriented investments rather than defensive plays.

Our Methodology

We first sifted through stock screeners, ETFs, and financial media reports to compile a list of the top tech stocks that have grown over 15% in the past 3 years. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024.

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)

3-Year Revenue CAGR: 22.19%

Number of Hedge Fund Holders: 95

Applovin Corporation (NASDAQ:APP) builds a software-based platform for advertisers to enhance the marketing and monetization of their content. It serves individuals, small and independent businesses, enterprises, advertisers & advertising networks, mobile app publishers, and indie studio developers. It operates through two segments: Advertising and Apps.

UBS raised the firm’s price target on AppLovin to $475 from $450 on May 8 while keeping a Buy rating. This is because the company’s Q1 2025 results reflected another quarter of broad-based strength. The company made $1.48 billion in quarterly revenue, which was an improvement of 40.25% year-over-year. AppLovin’s Advertising business alone generated $1.16 billion in revenue in Q1.

This was driven by improvements in the company’s AI-powered tech for app discovery and the contribution of its web-based advertising solution. Notably, over 90% of the company’s ad revenue comes from mobile games, which aren’t directly impacted by tariffs. The analysts at UBS also noted that Applovin Corp. (NASDAQ:APP) tested exclusionary targeting for ad audiences, which could potentially attract more advertisers due to the company’s willingness to engage with advertiser requests.

ClearBridge Mid Cap Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q1 2025 investor letter:

“AI-beneficiary and strong fourth-quarter performer AppLovin Corporation (NASDAQ:APP) came under pressure from several reports from short sellers seeking to capitalize on a reversal in the company’s strong momentum amid the broader tech retreat. However, we believe the AI-enabled advertising software platform continues to be one of the best AI opportunities within the mid cap market. Recent positive channel indicators for its e-commerce business point toward a solid and persistent future of attractive returns for AppLovin, and we used the short-natured weakness to add to our position.”

Overall, APP ranks 6th on our list of the best technology stocks to buy for long-term investment. While we acknowledge the growth potential of APP, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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